Questa è una versione PDF del contenuto. Per la versione completa e aggiornata, visita:
https://blog.tuttosemplice.com/en/mortgage-fire-insurance-is-it-mandatory-yes-but-not-with-the-bank/
Verrai reindirizzato automaticamente...
When you decide to buy a home with a mortgage, you encounter a series of requirements and additional costs. Among these, one of the most important is fire and explosion insurance. This is a matter that combines tradition and innovation: the home as a safe-haven asset, a pillar of Mediterranean culture, protected by modern financial instruments. But is this insurance really required by law? The answer is yes, but with an important clarification that protects the consumer: the obligation is to purchase the policy, not to choose the one offered by the bank.
Understanding this distinction is crucial for every future mortgage borrower. The law, in fact, steps in to protect both the value of the property, which serves as collateral for the lending institution, and the debtor themselves from unforeseen and potentially devastating events. However, the same legislation guarantees the customer full freedom to choose the most suitable and convenient solution on the market. This awareness transforms an obligation into an opportunity for an informed choice, allowing you to optimize the costs and coverage related to your first-time homebuyer mortgage.
Italian law is clear: an insurance policy against fire and explosion damage on the mortgaged property is mandatory to obtain a mortgage. This requirement was introduced to ensure that the property, the asset securing the loan, is protected, thus reducing the risk for both the bank and the borrower. In the event of partial or total destruction of the property due to a fire or explosion, the insurance steps in to cover reconstruction costs, ensuring that the lending institution does not lose its primary collateral.
Various legislative provisions, including the Consolidated Banking Act and subsequent decrees, have solidified this principle. In particular, regulations such as those deriving from Decree-Law No. 59/2012 have strengthened consumer protection, specifying not only the mandatory nature of the coverage but also the customer’s rights. The goal is twofold: on one hand, to secure the bank’s investment; on the other, to prevent the debtor from having to pay mortgage installments for an asset that no longer exists.
Although fire and explosion insurance is mandatory, the law establishes with equal firmness that the customer has the right to freely choose the insurance company. The bank providing the mortgage cannot force you to accept its policy, nor can it change the loan conditions if the customer decides to use an external insurer. This practice, defined as “unfair,” is penalized by regulations protecting competition and consumers.
The lending institution is required to present the customer with at least two quotes from different insurance companies not affiliated with the bank itself. This measure aims to ensure transparency and stimulate competitive comparison. If the customer finds a more advantageous offer on the market, they can present an alternative policy to the bank, provided it meets the minimum coverage requirements requested by the institution. The bank cannot refuse the mortgage based on the company chosen by the customer, reinforcing a fundamental principle of market autonomy.
Choosing between the policy offered by the bank and an external solution requires a careful evaluation of costs and benefits. Often, policies proposed by lending institutions, known as Credit Protection Insurance (CPI), can be more expensive than those available on the market. The convenience of a payment plan bundled with the mortgage installment can hide a higher insurance premium and less flexible conditions.
An external policy, on the other hand, offers the opportunity to customize coverage and get a more competitive price. Comparing different quotes allows you to find the most suitable coverage for the property’s reconstruction value and your specific needs. It’s important to verify that the external policy has minimum contents equivalent to those required by the bank, such as “first absolute risk” coverage, which guarantees compensation for the entire damage up to the agreed-upon maximum. An informed choice not only leads to financial savings but also ensures that the coverage better aligns with your real needs, a crucial aspect when it comes to mortgage-related insurance.
The mandatory fire and explosion policy covers direct material damage to the property caused by specific events. Basic coverage typically includes fires, explosions, bursts (e.g., from gas leaks), implosions, and lightning strikes. Some policies also extend coverage to related events like damage from smoke, gas, and vapors generated by a fire. The primary goal is to protect the building’s structure, meaning the walls and fixed systems, ensuring resources are available for its potential reconstruction.
However, it is crucial to be aware of what the basic policy does not cover. Generally, damage to the home’s contents, such as furniture, appliances, and personal belongings, is excluded. To protect these items as well, you need to purchase additional riders. Furthermore, damage caused by willful misconduct (intentionally) or gross negligence by the insured is not covered. Carefully reading the information set before signing is essential to fully understand the extent of the protections and any deductibles or coverage limits. In the case of a mortgage refinance (surroga), it is possible to transfer the policy or request a refund of the unused premium.
In summary, fire and explosion insurance is an essential pillar when taking out a mortgage in Italy, a regulatory requirement designed for the security of all parties involved. However, the most relevant aspect for the consumer is not the obligation itself, but the freedom of choice that the law guarantees. You are not bound to accept the bank’s offer but have the full right to explore the market to find the most advantageous and comprehensive solution.
This awareness allows you to turn a bureaucratic formality into a strategic decision. Comparing quotes, analyzing clauses, and thoroughly understanding the coverage offered are key steps to best protect your real estate investment, often the most important one in a family’s life. The home, a symbol of stability and tradition, deserves modern protection chosen with care, one that intelligently and personally balances costs and benefits.
Yes, in Italy, purchasing a policy that covers the risks of fire and explosion on the property is a mandatory legal requirement to obtain a mortgage loan. This insurance is required by the bank as collateral for the financing, as it protects the value of the mortgaged asset from events that could destroy it. The legislation, including Law 100/2012, clearly establishes this obligation, aimed at protecting both the lending institution and the borrower.
Absolutely. The law not only allows it but promotes it as a consumer right. The bank cannot force the customer to purchase the policy it offers, nor can it penalize them with worse mortgage terms if they choose an external alternative. The lending institution is required to evaluate the external policy presented by the customer, provided it offers equivalent coverage to what is required. In fact, the bank must provide the customer with at least two quotes from insurance companies not affiliated with it.
The basic coverage of a fire and explosion policy focuses on direct material damage to the property. This includes damage caused by fires, explosions, bursts (e.g., from gas leaks), lightning strikes, and, in many cases, smoke damage. The goal is to cover the costs of repairing or rebuilding the walls and structure. Generally, it does not include damage to the home’s contents (furniture, personal effects) or damage caused by willful misconduct or gross negligence. For broader protection, you can add optional riders.
In the event of early mortgage repayment, the policyholder is entitled to a refund of the portion of the insurance premium paid but not used. This right is established by the regulations of IVASS (Institute for the Supervision of Insurance). The insurance company is required to return the remaining amount, calculated in proportion to the unused coverage period. The same principle applies in the case of refinancing (surroga), i.e., when you transfer the mortgage to another bank.
Yes, the insurance policy that covers damage from explosion and fire on the property is the only one that is truly mandatory by law when applying for a mortgage. Without this coverage, the bank will not grant the loan. The purpose is to protect the value of the asset used as collateral for the loan, thus protecting both the owner and the lending institution in case the property is damaged or destroyed.
No, you are absolutely not forced to. Although the policy is mandatory, you have the full right to freely choose the insurance company you prefer. The bank is required to present you with at least two quotes from companies not directly affiliated with it, but it cannot in any way bind you to its offer or change the mortgage conditions if you decide to go with another company. The important thing is that the chosen policy meets the minimum requirements set by the lending institution.
The mandatory basic coverage compensates for direct material damage to the property (i.e., the walls and structure) resulting from events such as fires, explosions (e.g., from gas leaks), bursts, lightning, and short circuits. It generally does not cover damage to the home’s contents, such as furniture, appliances, or personal belongings, for which you need to purchase additional riders. The policy is assigned in favor of the bank, and the compensation is usually equal to the commercial value of the property or the outstanding mortgage debt.
Quite simply, if you do not purchase a fire and explosion policy, the bank will not grant you the mortgage. The law and banking regulations make this insurance an indispensable condition (*sine qua non*) for the disbursement of a mortgage loan. The property serves as collateral for the bank, which needs to protect itself from the risk that this collateral could be destroyed or severely damaged.
Yes, it is possible to change the policy even after the mortgage has been taken out. You can exercise your right of withdrawal, usually within 60 days of signing, or cancel the contract at its annual renewal, respecting the notice period (usually 30 days). It is crucial, however, that you provide the bank with a new policy with equivalent or superior coverage, assigned in its favor, so as not to interrupt the required guarantee. This flexibility allows you to look for more convenient solutions over time.