If there is damage or destruction of real estate, which serves as a mortgage loan, the bank has a priority claim to the insurance payment of insurance benefits. The bank thus decides whether the property needs to be repaired or whether the mortgage will be repaid and terminated.

The insurance is a condition for the start of the mortgage

One of the conditions for the inclusion of a mortgage loan is the negotiation of real estate, which serves as a mortgage. When arranging a mortgage, the applicant must submit, among other documents, an insurance contract, proof of payment of the insurance premium and confirmation from the insurance company that the insurance benefit has been settled in favor of the bank. The form for the binding is received by the applicant from the bank.

Here it is necessary to emphasize, even in the case of an apartment, it is a connected real estate, ie the building itself, of what is “firmly built-in. There is no need to connect a household, which only applies to the equipment of the apartment (even here, however, it is possible to insure its building system; the insurance company offers various products, such as a combined combination).

The first bank is fully insured

The agreed insurance must be binding in favor of the bank. This means that in the event of an insurance event, the bank will have a priority claim to the insurance benefit. The client is obliged to immediately notify the bank of the eventual code arising from the mortgage of the real estate. The bank will be informed directly from the insurance company, which must give its consent to the payment of the insurance indemnity. The bank then determines for itself whether it will be used to restore the property to its original condition, or whether its receivable from the client will be paid from it.

Binding of insurance indemnity generally means limited disposition of the first, pledging of receivables, the subject of which is insurance indemnity. The payment of the insurance indemnity is based on the agreed conditions in favor of the person (usually the creditor of the insurance company). In the event of an insured event, the insurance indemnity is paid in its favor.

How to deal with the insurance benefit

The procedure for dealing with the insurance company ‘s disbursed funds will vary from bank to bank. The rules are set out in the binding agreements. Somewhere, all the funds from the insurance company are always sent first to the bank, which then decides how they will be used. Elsewhere, in the case of smaller codes, when the bank considers that the insurance event did not significantly reduce the value of the property, the insurance benefit was sent directly to the number of clients. Here are the specific examples.

Raiffeisenbank in the case of a code event, have the insurance benefit paid out and the subsequent assessment of the scope of the code. Then find those variants of one. If the property is completely destroyed, the mortgage will be repaid from the insurance. If the code is relatively small, up to 100 thousand crowns, the bank does not examine the scope of the code and sent the full payment directly to the client. In the event that the code exceeds this limit, the bank will provide the client with the funds necessary to restore the property to its original condition: the bank’s appraiser will determine the value of the property and the bank will then repay all invoices and the code.

UniCredit Bank proceeds in the case of small codes a little different. If it is assessed that the insurance event does not have a significant effect on the value of the mortgaged property, the funds from the insurance company are transferred directly to the client. In the other case, the insurance benefit is fully insured to the bank and there is a direct payment of funds to repair the property.

So Mortgage bank In the case of small codes, let the insurance company send the disbursed funds directly to the client. If the insurance indemnity is up to 150 thousand crowns, it is realized only between the client and the insurance company without the bank. When fully above this limit, the insurance company informs the bank and finds out the amount on which to pay the funds.

Real estate repairs

In the event that the damaged property is reconstructed, the bank has arranged for repairs and checks that the disbursed funds are not used otherwise than for what they are intended for. From the insurance indemnity, which has from the insurance company in its own, pays the construction company invoices. This means, however, that if the bank is not willing to pay the invoices of evil, the client may in some cases get into the need to finance repairs. If it is always individual, it is necessary to negotiate with the bank such conditions that will be suitable for both parties. For example, the bank will provide me with a deposit. If the property was restored from the client’s own resources, the bank will send him funds from the insurance directly to et.

The debtor is obliged to ensure at all times that the mortgage is settled so that the value of the mortgaged property does not decrease. Otherwise, the bank will require me to put a real estate. If, after the damage to the mortgaged property, the owner decides not to repair it and does not agree with the bank on another day, the bank would in particular terminate it. It would pay its claim from the insurance indemnity, including all fees for non-compliance with contractual conditions and thus the cost of debt collection.

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This should be taken into account by the client when arranging a mortgage in the event that he is not the owner of the property, which serves as a bank. He must be able to agree on a possible insurance event with its owner. In these situations, where there is more than one property in one case, some banks require that the mortgage be mortgaged to the client taking the mortgage, others want that the mortgage be agreed to the owner of the property.

The bank, first and foremost for its mortgage, needs the mortgaged property not to lose its value for the period of fulfillment. The bank does not have to take the property, which is financed by a mortgage. Therefore, in situations where the real estate is a property other than the one that is the subject of the heat, the bank is required to make only a bonded property. This is, for example, the case of buying a rough apartment.

Some of the requirements of banks for insurance real estate

The insurance must be agreed at least in the amount provided. Most banks require and others recommend that the insurance be agreed for a so-called new price, ie one at which, in the event of an insurance claim, the same or comparable real estate will be sold in the same city. On the contrary, the time price is not accepted, ie such as the property should insure before the insurance event. When setting the price time, he arrived at the degree of wear. The insurance company must have at least basic risks, which means special risks, or the risk of damage and destruction by more water flowing out of the taps.

Banks do not require the client to arrange insurance with a selected cooperating insurance company, but if they do, they may receive certain benefits, such as a reduced annual rate.

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