Can I change my home insurance if I have a mortgage?

Can I change the home insurance home insurance policy I have taken out without it affecting my mortgage? The answer is yes, but with some important considerations to bear in mind.

If you are thinking about changing your home insurance, you need to know that you can choose the insurer that best suits you, provided that the new insurance policy meets the mortgage's conditions. The financial institution does not always require you to take out the insurance it offers, but it does require that the insurance covers the property's value. 

Steps to change home insurance if you already have a mortgage

• Check your mortgage's contract: Make sure that the new insurance not only covers the value of the property, but that it also meets the minimum requirements established by the bank. If you do not meet the mortgage's requirements, the bank may have the right to apply additional charges or even take out a home insurance policy for you, which is generally more expensive.

   

• Notify the bank of the change: Once you have chosen your new insurance policy, you must notify the bank, so that they can update the mortgage's information. Some financial institutions will ask you to submit a copy of the new policy or to inform them about the changes.

What happens if you do not notify the bank of the change in your home insurance?

You must inform your bank when you change the insurance policy. If you do not and there is an accident in the home, the bank may not accept the new insurance policy's cover, which could complicate the compensation process. In addition, some banks may apply penalties if you do not have an appropriate insurance.

With a little planning, changing your insurance policy can be an excellent opportunity to improve your cover or obtain a better price. If you are looking for options, we recommend that you take a look at our DKV home insurance.