This occurs where the bank has leant money to someone who has defaulted on the repayments. Ultimately they have to take possession of the property but need adequate Insurance in place.
Usually by this stage their relationship with the person owing the money has broken down irretrievably, so the bank are unable to find out what, if any, insurance is in force for the building.
In any event, once the previous owner no longer has a financial interest in the property, any cover they might have had is of no use anyway.
Arranging Insurance for repossessed properties
It’s a fairly simple process for the bank; they send us the information of the property and it’s circumstances, and we arrange immediate cover for them. The bank are then protected until they either sell the property or rent it out (usually it’s the former).
What to consider when arranging insurance for repossessed properties
Is the property empty? – many insurers don’t like covering empty properties, so make sure you use a property insurance broker who can find one that accommodates them
If the property is occupied, what type of tenant is in there? – Insurers like to know if the tenant is a working professional benefit recipient or otherwise.
What’s the property made of? – Insurers always want to know the construction of the building and a specialist insurer might be required of the property is of “non standard” construction.
What is the rebuild cost of the building? – this isn’t always immediately obvious, and you may need to have a survey to find out the rebuild cost (not to be confused with the market value)
These are just a few things to consider when looking into insurance for repossessed properties.
If you’re about to repossess a property or acquire one for another other reason, contact us for a no obligation quotation.
Evans Insurance Brokers – a specialist Property Insurance Broker