Comment by girvo
2 days ago
The insurance is with anyone. They own the house, not you, and so they want to ensure it's not going to burn down (or more likely get washed away in a flood, where I live) and be irrecoverable, so they require you have the home insured. They care naught for contents insurance, just the house/building.
Is it different in the US to the UK? Surely you own the house and have a liability on the mortgage?
When we bought our house in the UK (a long time ago), it was a condition of the mortgage that we had buildings insurance. The theory is that if the house burns down or similar, the bank will want the rest of their money back and the house buyer is unlikely to be able to afford that considering that they needed a mortgage in the first place.
It's basically the bank just outsourcing a lot of risk to the insurance company (via the house buyer).
Why would they go via the house buyer? They can insure the house themselves.
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But if they're the ones that want the building insured, it seems like it would be better for everyone if they're the ones that source the insurance.