A mortgage loan issued against real estate has a long repayment period: from 5 to 30 years. And the bank that issued it quite rightly wants to protect itself from possible financial losses that may result from various circumstances. Mortgage insurance serves exactly this purpose.
What it is
Today, concluding an agreement to issue a loan for the purchase of housing on mortgage terms provides for several types of insurance:
- insurance of the collateral (mortgage);
- personal insurance (health and life) of the borrower;
- insurance against the risk of loss of ownership (title);
- liability insurance of the borrower in case of non-repayment of the loan.
The main purpose of all types of insurance accompanying the conclusion of a loan agreement and a mortgage agreement is, first of all, the redistribution of risks associated with a long debt repayment period.
The second goal that was set when creating the mortgage insurance system in our country was to make mortgages more affordable, reduce the down payment and interest.
It is expected that this will allow a large number of people who want to solve their housing problems without resorting to government assistance.
Who benefits from it?
Insuring the mortgaged item is beneficial to the bank. After all, it is he who owns the property that is pledged until the end of the payment period. Therefore, destruction or reduction in the value of this property as a result of damage is unprofitable for it.
The bank can protect itself from such financial losses by insuring the real estate it holds as collateral.
Life and health insurance is most beneficial for the borrower himself. After all, many diseases or injuries lead to loss of ability to work, that is, a source of income.
And the amount that will be paid by the insurance company will allow you to repay the debt to the bank. In the event of the borrower's death, his heirs will also be able to repay the loan from the insurance funds.
Title insurance is also beneficial to the borrower. But only if he is a bona fide purchaser.
That is, if it turns out that the acquisition of real estate occurred with violations through no fault of the buyer, then he will be protected from financial losses associated with the loss of his rights.
But borrower liability insurance is beneficial to both parties in the relationship related to the loan. The bank is protected from losses if, after the sale of the mortgaged apartment, it does not receive the full amount of the debt.
And the borrower receives the following benefits:
- reduction of the down payment;
- lower interest rate;
- absence of claims from the bank in the event of termination of payments and sale of the mortgaged apartment, even if these funds are not enough to repay the entire debt.
Is mortgage insurance required or not?
The law obliges you to insure only the collateral - an apartment or other real estate. Even if the insurance clause is not included in the loan agreement, the borrower-mortgagor is obliged to insure the property being mortgaged.
In practice, a loan will not be issued without an insurance policy. The term of such insurance coincides with the term of the loan. After its repayment and removal of the encumbrance, the obligation to insure one’s property turns into a right that may not be used in the future.
The insurance amount cannot be less than that issued under the loan agreement. Most often this is the loan amount plus 10% on top.
But many property owners prefer to insure their home for its full value. This will allow you not only to cover the debt to the bank, but also to receive the rest of the amount in your hands if such a need arises.
Voluntary
But all other types of mortgage insurance are voluntary. And if the bank tries to impose them on the borrower by including them in the agreement, then it is acting in violation of the provisions of the law. Although one can understand the bank's interest. He wants to protect himself from as many risks as possible.
Title insurance is valid during the statute of limitations for these transactions, that is, 3 years. This insurance is especially relevant for buyers in the secondary market, where there is a possibility of becoming embroiled in litigation for violation of the rights of third parties.
But even in the market of new buildings, violations and fraudulent schemes are not uncommon, which can lead to the recognition of the transaction as invalid with all the not very pleasant consequences.
Borrower liability insurance is strongly recommended not only by banks and insurance companies, but also by legislators.
Since loans insured in this way are regarded by the bank as more reliable, it does not need to transfer its risk of not receiving the full amount to other borrowers. Therefore, you can set a lower percentage and reduce the down payment to 10%.
Legal basis
The main provisions regarding mortgage insurance are set out in the Mortgage Law, which regulates all aspects of this legal relationship (dated July 16, 1998).
It was Article 31, on insurance, that was amended in June 2014. The same article establishes the obligation to insure real estate pledged as collateral.
You can refuse voluntary insurance by referring to the Law “On Mortgage”, which states that the borrower has the right, but is not obliged, to insure his liability.
And if the bank insists, you can refer to the law, which directly prohibits the imposition of additional goods or paid services.
What features does it have?
Since all types of mortgage loan insurance are independent, each of them can be purchased separately.
But in practice, most often a single contract is concluded, which includes all the conditions relating to both personal insurance and property and liability insurance. Such a comprehensive product is offered by many banks.
The advantage of such a contract is that it will cost less than four separate ones. But it is worth remembering that insurance is an individual product.
Its terms will be different for each borrower. The cost of insurance will be influenced by the age and profession of the borrower, the characteristics of the property being purchased, the loan amount and the term of the contract.
But, as a rule, this is about 1-1.5% of the cost of the loan. In rare cases the value may be less or more.
The peculiarity of borrower liability insurance is that it does not eliminate the risk of being left homeless in the event of non-payment of the loan.
But it allows you to avoid additional financial requirements if, after selling the apartment at auction, the proceeds, for various reasons, turned out to be less than the loan debt. The missing funds will be paid to the bank by the insurance company that entered into the contract.
What to do if you don’t have enough money to pay off your debt in case of an insured event
Bankers assure that this cannot happen. Before making the next calculation, the insurance company must find out how much the debt is. At the same time, the bank does not allow any part of the debt to be “not covered” by the insurance policy.
Company refusal to pay
In this case, you need to contact the arbitration court. You need to know that the bank will be on your side. But it is worth investigating only if, when applying for insurance, you did not hide the fact due to which the insured event occurred. In this case, the court will be on the side of the insurance company.
What risks might there be?
Various types of mortgage insurance seek to minimize the consequences of various risks. In this case, the list of insured events, as well as the amount of payment, will be clearly defined by the contract. Let's take a closer look at them.
When insuring real estate pledged, the risk of destruction or damage to residential premises as a result of fire, natural or man-made disaster, technological errors or intentional actions of third parties is primarily taken into account.
If the home is damaged, compensation is paid to the borrower. Of course, only if he is not involved in the occurrence of the insured event.
But if the home was completely lost, then the bank will receive an insurance payment in the amount of the loan balance. The risks of the borrower's personal insurance will be his death or disability (groups I and II).
If this event occurs during the validity period of the contract, then the insurance company is obligated to repay the debt and interest on the loan.
The mortgaged housing will be freed from encumbrance and will become the property of the borrower, and in the event of his death, his heirs.
Title insurance considers the risk of a court decision on the loss of title to a home under collateral. The risk that the loan will not be repaid due to various circumstances is insured as the borrower's liability.
In this case, even if the sale of the mortgaged home does not cover the debt, the insurance company will pay it off. For the bank, this is the risk of financial losses in the event of failure to fulfill obligations under the contract.
Where can I apply?
Despite the fact that today many companies offer mortgage insurance services, they are all bound by obligations with the AHML Agency.
This structure, created by the Government to develop the mortgage lending system in Russia, acts as a reinsurer under borrower liability insurance contracts.
Therefore, it is best to choose one of the insurance companies that are official partners of AHML. Their list is presented on the Agency's website.
Large banks that implement mortgage programs usually have their own recommendations for choosing an insured, which coincide with the AHML list.
Banks prefer to deal with well-known and large participants in the insurance market, so they often do not agree to the candidate proposed by the borrower, so it is advisable to reach agreement on this issue.
Refusal to conclude an insurance contract may result in a requirement to return the entire remaining amount. Such conditions are provided for in the loan agreement.
Mortgage insurance is not a bank's desire to get as much as possible. This is a very useful and effective tool that allows you to protect interests and reduce the risk of financial losses for both the lender and the borrower. In addition, it is insurance that makes mortgages more affordable.
Video: IncomePoint.tv: Mortgage Insurance
Most often, banks require insuring the purchased apartment or house against damage or loss, insuring the title (the risk of loss of ownership as a result of double sales or fraud), as well as the life and health of the client.
Do I need insurance?
According to the law on mortgage lending, only insurance of the collateral, that is, the apartment itself, is obligatory for you, as a borrower. However, banks would not be banks if they did not minimize their own risks, especially since a mortgage, by definition, is a loan for the maximum possible term with the lowest possible rate. Therefore, banks prefer that you insure your life, health and legal purity of the purchased apartment.
Title insurance is required for the first three years, until the statute of limitations on challenging real estate transactions expires, and this applies not only to apartments purchased on the secondary market. Banks prefer not to forget about cases of so-called double sales, whether intentional or committed by mistake. The answer to the need for life insurance lies in the statistics: there are practically no failures. On the one hand, for those who are not insured, banks offer higher interest rates, on the other hand, borrowers understand perfectly well that anything can happen in life, and an apartment is bought so that children can live in it later. So, given the risk indicated above, life insurance is equally necessary for both the bank and you.
How much does it cost?
It is hardly worth considering each type of insurance separately, because insurance companies offer comprehensive products that include all three types of insurance required by banks. The cost of such a package varies from 0.5 to 1.5% of the loan cost. If you insure each risk separately, it will be significantly more expensive. Insurance is as individual a thing as each borrower is individual. If a mortgage is taken out by a young man, an office worker who is interested in collecting stamps or butterflies, then, obviously, the cost of insurance will be minimal. If the client is a fifty-year-old steelworker who moonlights as a stuntman, then the insurance company should be understood.
The cost of insurance also largely depends on the collateral itself - whether it is an elite home or a Khrushchev-era building, a new house or a pre-revolutionary one, a well-kept building or a slum that survived a fire. For example, if an office worker decides to purchase a house in an earthquake zone, the cost of insurance will, of course, increase.
About the amount of the “thirteenth payment”
If an apartment costs 3 million rubles, of which 1 million is own funds, and 2 million rubles are borrowed funds, then at an annual rate of 12% the monthly payment will be approximately 22 thousand rubles. Taking into account the cost of insurance, for example, 1% of the loan amount, we find that in the first year you will have to pay 20 thousand rubles - an amount commensurate with the size of the monthly payment. Over time, as the principal amount decreases, the cost of insurance will decrease. On the other hand, the property he purchased gets older from year to year; due to this fact, it is not so easy to predict the amount of the insurance payment.
What to do if an insured event occurs?
When an insured event occurs, you should notify the insurance company and the bank, after which the mechanism will be launched. The fact is that the recipient of insurance payments is a credit institution, and the issue of payments will be decided at the level of the bank and the insurance company, although it is definitely worth keeping your finger on the pulse of the process.
An insured event has occurred, but there is not enough money to pay off the debt?
This, according to bankers, simply cannot happen, because before making the next calculation, the insurance company is interested in the size of the debt, and the bank will not allow any part of it to be “uncovered” by the policy.
Insurance company's refusal to pay
In this case, there is only one way: to the arbitration court. And here you need to remember that the bank in such a situation remains your ally. However, it is useless to sue if, when concluding an insurance contract, you concealed from the insurance company a fact that indirectly or directly led to the insured event. In this case, the court will definitely take the side of the insurers, and the apartment will have to be sold.
Is it possible to refuse insurance?
It is possible, but then the bank will require you to return the remaining amount of debt, which is provided for in the agreement. If necessary, the insurance company can be changed by first agreeing on the candidacy of the new insurer with the bank. Credit institutions prefer to deal with very large players, for whom payment amounts of millions of rubles are not an out of the ordinary event.
Sravni.ru advice: Find an insurance company yourself that will provide you with its services for less money. When insuring with a bank, there is a high risk of overpaying a large amount.
When drawing up a mortgage agreement, clients are offered to take out life insurance, since the document is concluded for a long period. Thanks to this service, the debt will be paid to the bank, even if the borrower is unable to do so due to health reasons. Before concluding an agreement, you need to familiarize yourself with the peculiarities of its execution, cost and legality.
Is life and health insurance necessary for the borrower with a mortgage?
First you need to make sure why the borrower needs insurance. It is needed to protect against the risk of non-payment of a loan due to health difficulties. This may be due to loss of capacity.
But no one can predict whether injuries may occur during the payment of the mortgage, due to which a partial or complete loss of ability to work is recognized.
Therefore, banks offer to issue an insurance contract to protect themselves from the risks of possible non-payment. If the borrower has such a policy, then in the event of disability, the company that provided the services will repay the loan.
If an insured event occurs, the bank client will not pay the mortgage amount.
Insurance cost
Each insurance company has its own prices for services, so it is difficult to determine the exact price.
The tariff is determined not only by gender and age, but also by the client’s health status. Usually it is necessary to undergo an examination by doctors, which determines whether there are chronic diseases. If yes, then the price of insurance will be higher.
If you have complex ailments, a mortgage is usually denied. The cost of insurance is affected by your profession. If the client works in an office, then there will be no increase in price.
But for risky professions, the cost is inflated. If the client previously had voluntary insurance, then when applying for a loan you need to provide a document.
If you take out comprehensive insurance, which includes protection of life, collateral, and title, the price for services will be lower. Payments on it are counted along with the debt, and become smaller every year.
Where can I get an insurance policy?
Today there is no such thing as accreditation of an insurance company with banks. But they have the same requirements. When receiving a mortgage, the borrower is offered to use the services of one of the insurance companies. The bank receives a commission for each concluded agreement.
If the borrower has insurance, he may require to use the services of his insurance company when obtaining a mortgage. You can find a bank where such a document will definitely be accepted. To do this, an agreement is drawn up with the insurer to add a new beneficiary - the bank.
Therefore, the borrower does not need to look for an insurance company. When applying for a mortgage, the bank offers a list of its organizations that provide services.
You just need to choose the conditions that suit you, and you can take out insurance.
Documents for obtaining insurance
In banks, registration is completed quite quickly.
The client must prepare the following documents:
If the client provides a medical certificate of health, which is certified by the seal and signature of a specialist, then it affects the amount of insurance payments. Every person has the right to demand a low interest rate. You should always remember your personal rights and fill out documents carefully. When the down payment is paid, the borrower receives an insurance policy.
What to do if an insured event occurs?
If an insured event occurs (dismissal, illness), the borrower must read the contract. If he died, then this should be done to the relatives. Then you need to contact the insurance company by sending a notification there. Usually a short period is specified during which the borrower can apply.
After this, the company offers to prepare the necessary documents, which will determine whether the insurance company will repay the mortgage or not. The fact of an insured event is determined by the company, for which it carries out an inspection.
Documents are provided as evidence of the insured event. If there is a dismissal, it is necessary to provide an order, confirmation from the employer, and a work record book. With the assignment of disability, the borrower will have many documents confirming this fact.
The insurance company checks the documents and then decides whether to pay compensation or not. The beneficiary is the bank to which the money is paid. If an insured event occurs, the borrower is released from repaying the loan. Using this instruction, insurance rights are exercised.
Insurance company refusal to pay
All payment terms are specified in the contract. It indicates the amount of amounts that are due upon the occurrence of an insured event. In this case, not only the insurer, but also the policyholder has responsibilities.
If payment is refused, then these reasons are justified. Compensation can be provided no earlier than all documents have been collected. This must be done by the policyholder.
If compensation is needed due to deteriorating health conditions, then you need to collect the necessary medical certificates.
They will be the confirmation on the basis of which payments are made.
Some companies refuse to pay compensation. For example, the incident was not recognized as an insured event.
- Reasons for refusal may be:
- justified;
- unreasonable;
conditionally justified. The former are legal because they do not infringe rights. Incidents not specified in the contract are considered grounds for refusal.
In the second case, a violation of insurance rights occurs. Then you need to go to court. Usually the decision is made in favor of the client. Conditionally justified reasons are those for which there is no clear definition in the law.
- Not everyone goes to court, but this is due to several reasons:
- lack of time;
- collection of many documents;
Before filing an application with the court, you should contact a lawyer who will help you choose the best solution to the problem. A specialist will help you draw up your application correctly so that it is accepted immediately. It indicates the violations due to which the appeal is being drawn up. You need to rely on the law. The amount of the claim is determined by expert estimates. The client has the right to demand compensation for state duties and other expenses. If the decision is made in favor of the client, the company will pay him a penalty for the entire period of delay.
Is it possible to refuse insurance?
All banks take into account their rights. Therefore, every client is encouraged to take out mortgage insurance. He has the right to refuse it within 14 days, which is prescribed by law. But should we give it up?
Without taking into account insurance, the bank may not issue a mortgage or increase the interest rate. In the second case, you will need to overpay approximately 2% per year. In addition, insurance protects against many unforeseen situations.
How long does life insurance last for a mortgage?
The property is insured for the full loan period. For life and health, this document is also valid for the entire period. Title insurance is concluded for 3 years, since such a statute of limitations is established by law.
Life and health insurance is a useful service for which the client pays himself. In this case, he is protected from many situations. Whether it is worth formalizing it or not is up to him to decide, since no one has the right to force him to do it. If you still want to take out insurance, you need to read the document. All its terms and conditions must be clear.
Dmitry Balandin
Mortgage insurance is a key point when purchasing real estate with a home loan. The law requires that the collateral be insured against damage or loss. But credit organizations quite often put forward demands for insurance of the potential borrower’s ability to work and life. What is mortgage insurance, and can you refuse it?
Why do you need insurance?
The main players in the housing lending market are banks. Focusing on modern tax legislation, they oblige their clients to take out insurance for the purchased property. The task of banks is to minimize potential risks. Taking out a home loan is a risky transaction in itself, since the money is allocated for a maximum period at a minimum interest rate.
Title mortgage insurance is necessary to minimize the risk of challenging the transaction in court, especially for secondary housing. Often in practice there are also cases of resale of the same apartments and other errors. Life insurance is necessary for both the borrower and the bank. Because when an insured event occurs, mortgage payments will be paid by the insurance company.
Insurance cases
Even before signing a contract for mortgage and life insurance, you should familiarize yourself with the list of insured events.
If the life of the borrower is insured, such cases are:
- death;
- partial or complete loss of ability to work.
If these cases occur, the property remains the property of the borrower, and the insurance company pays the loan in full.
If the insured object is real estate:
- damage or loss of property as a result of fires, floods, natural disasters;
- illegal actions of third parties;
- defects in the design.
Title insurance protects against loss of title to property purchased with a mortgage.
If the property is damaged, the borrower receives insurance compensation. And if it is physically lost and the right of ownership is lost, then the money is paid to the creditor bank.
If such cases occur, you should immediately contact your insurance company.
Registration process
Apartment insurance is issued on a voluntary basis. To do this, you need to fill out an application about your desire to receive an insurance policy. Here you also need to indicate a list of documents that will be attached to the application.
The insurance organization has the right to request any additional information and documents that were not specified in the application. She can also check the accuracy of the information provided by the policyholder. The latter undertakes to report all significant circumstances affecting the degree of risk determination.
List of documents for life insurance
Typically, mortgage and life insurance can be obtained from a bank. Therefore, only a passport is required from the policyholder.
If an insured event occurs, the list of documents to be provided expands significantly.
Upon the death of the borrower, you must provide:
- A document confirming the fact of death.
- Certificate of cause of death.
- Report of an accident if it happened at work.
- Documents issued by competent organizations confirming the occurrence of an insured event.
If you have lost your ability to work, you must provide:
- Certificate confirming the disability group.
- Documents confirming the establishment of a disability pension.
- A certificate of diagnosis with a description of the causes of disability.
- Certificate-extract from the medical record.
Mortgage insurance: cost
Risks that the lending bank obliges to insure the borrower are subject to certain rates.
Apartment insurance will cost 0.3-0.5% more if the object is the real estate itself. In this case, the interest rate depends on the material of the floors, the technical condition of the house, the nature of the decoration of the premises and other similar points.
The cost of life insurance for the borrower depends on his type of activity, age, and health. Typically, the interest rate on life insurance is no more than 1.5%. The bank also has the right to require insurance of the borrower’s income.
The title insurance rate is no more than 0.7%.
If you sum up all the insurance costs when applying for a mortgage, their share will be about 2% during the year of the residual value of the loan. These payments must be made once a year. They gradually decrease in proportion to the borrower's debt to the bank.
Is it possible to refuse?
You can refuse insurance for a home loan. In this case, the bank will require the borrower to repay the amount of debt, which is provided for in the agreement.
If insurance is taken out at a bank, the borrower will most likely overpay a large amount. In this case, you can choose the insurer yourself. It can also be changed if necessary. You should choose reliable, reputable organizations for which large payments are commonplace.
Mortgage insurance: Sberbank (features)
Sberbank is one of the key players in the housing lending market. During the mortgage application process, he uses his own insurance system.
Sberbank considers mortgage insurance as an additional service. Moreover, if the borrower refuses it, then the mortgage interest rate immediately rises by 1%. Having insurance is not a prerequisite for issuing a loan.
The insurance policy can be terminated only at the request of the client. To do this, you need to submit a corresponding application, and it will be considered within two weeks.
If the borrower is already insured by another organization, his policy must meet the following conditions:
- The policy must cover life and disability.
- The policy must cover the repayment period of the home loan.
Sberbank has established the following insurance rates:
- 1.99% - life and health;
- 2.5% - life and health with a choice of additional conditions;
- 2.99% - involuntary job loss.
Main advantages and disadvantages
The main disadvantage of mortgage insurance is the cost of the contract. Title insurance is issued for 3 years. Life and health are insured for the entire period of payments, the maximum period of which can reach 30 years. Therefore, the amount of payments is quite large. The final cost of housing increases by the amount of insurance payments. If the borrower refuses insurance, the bank may impose additional payments on him, including increasing the mortgage rate.
The benefits include:
- In case of insured events, the policyholder pays the borrower's debts.
- Family members of the borrower will not repay the installments.
- Low probability of property loss.
- You can pay off your mortgage even if you have health problems.
Thus, compulsory mortgage insurance is beneficial for both the borrower and the lending bank. Since the housing loan agreement has a fairly significant term, risk insurance allows you to protect yourself from unforeseen circumstances.
In the vast majority of banks, lending conditions are structured in such a way that clients are forced to insure themselves in order to receive the lowest interest on the loan. Sberbank is no exception, where life insurance for a mortgage reduces the interest rate on it by 1%.
Due to the fact that mortgage lending is collateral in nature, the property that the bank client purchases will be pledged until the end of the mortgage payment. Since this type of loan is usually issued for quite long periods, anything can happen to the property or the borrower. The impact of external factors that negatively affect the collateral value is sometimes almost impossible to predict.
Considering the above, it is possible to understand Sberbank’s position on imposing mortgage insurance. The bank simply seeks to minimize the risk of losses. Although this does increase the borrower's overall costs while paying off the mortgage.
In total, Sberbank uses two types of insurance:
- life insurance - voluntary;
- Property insurance is mandatory.
Without insurance of the property, the bank will refuse to enter into a contract at all. But life insurance is variable. However, as mentioned above, without it, the mortgage interest rate increases.
Although no one wants to overpay, it is worth thinking about life insurance. Most mortgages are taken out for 15-25 years. During this time, the borrower's health may deteriorate, and he will no longer be able to pay the required amount. Accordingly, an unbearable burden will fall on the shoulders of relatives in the form of litigation and huge expenses. In the same case, if at the time of the borrower’s health deterioration or death, life insurance is active, then all expenses for repaying the mortgage loan are borne by the insurance company.
In addition, life insurance allows you to get a minimum interest rate. Its absence gives the bank every right to increase the mortgage rate both at the stage of concluding the transaction and after a certain time, which, however, will be specified in the contract.
Life insurance (the “Protected Borrower” program from “Sberbank Life Insurance” implies payments in the event of:
- the borrower receives group 1 or 2 disability;
- of death.
In addition, it is possible to take out extended insurance, where the list of cases in which the insurance company will pay the mortgage for the borrower is much wider. Needless to say, this type of insurance also carries additional costs.
Sberbank offers its clients life insurance through LLC IC Sberbank Life Insurance. However, it is worth noting that there are other insurance companies accredited by Sberbank, a list of which will be presented below.
Different insurance companies offer different terms and conditions for life insurance. On average, for a mortgage at Sberbank the price varies from 0.2 to 1.5% of the amount outstanding on the loan. In the vast majority of cases, insurance companies approach each client individually. Accordingly, the amount of insurance under such a system varies greatly among different borrowers. When calculating the cost of life insurance, factors such as age, gender, profession, health and even bad habits are taken into account.
Insurance companies accredited by Sberbank
The insurance companies indicated in the table participate in the insurance of collateral.
| Insurance company name | Agreement with Sberbank | Informs the bank |
|---|---|---|
| LLC IC "Sberbank insurance" | + | + |
| JSC "VSK" | + | + |
| LLC IC "VTB Insurance" | + | + |
| PJSC "SAC "ENERGOGARANT" | + | + |
| JSC SK PARI | + | + |
| Absolut Insurance LLC | + | + |
| JSC "AlfaStrakhovanie" | + | + |
| SPAO "Ingosstrakh" | + | + |
| SPAO "RESO-Garantiya" | + | + |
| LLC "SF "Adonis" | + | + |
| LLC SK Granta | + | + |
| Zetta Insurance LLC | + | + |
| LLC "SO "Surgutneftegas" | + | + |
| Liberty Insurance (JSC) | + | + |
| JSC "SOGAZ" | + | + |
| JSC SK Chulpan | — | + |
| JSC Insurance Business Group | + | — |
| LLC "IC "Independent Insurance Group" | + | — |
| JSC IC RSHB-Insurance | + | — |
| JSC "AIG" | — | — |
“Informs Sberbank” - that is, sends an email stating that the borrower has insured the collateral. No additional actions are required from the borrower.
“Agreement with Sberbank” - the insurance company entered into an additional agreement with Sberbank. In fact, the borrower can insure the collateral even with a non-accredited insurance company, but in this case, Sberbank will check this insurance company for compliance with the requirements. This review usually takes 20-30 days.
There is also a current list of accredited insurance companies on the official website of Sberbank. As for life insurance, the list of accredited insurance companies is largely similar and is also presented on the Sberbank website. However, please note that the presence of any company on this list does not guarantee that it will meet the conditions set by Sberbank. In this regard, before signing an agreement with any company from the list presented, you should check it for compliance with the requirements.
List of insurance companies accredited by Sberbank participating in life insurance for mortgages:
- LLC IC "Sberbank Life Insurance";
- LLC IC "Sberbank Insurance";
- Absolut Insurance LLC;
- LLC "SF "Adonis";
- JSC AlfaStrakhovanie;
- JSC "VSK";
- LLC IC "VTB Insurance";
- LLC SK Granta;
- Zetta Insurance LLC;
- SPAO "Ingosstrakh";
- Liberty Insurance (JSC);
- JSC SK PARI;
- SPAO "RESO-Garantiya";
- JSC "SOGAZ";
- LLC Insurance Company Surgutneftegaz;
- JSC IC "Chulpan";
- PJSC SAC ENERGOGARANT.
Naturally, you can try to obtain life insurance from a non-accredited insurance company. But in this case, Sberbank will check it. The verification, as in the case of collateral insurance, will take up to 30 days.
Why do you need accreditation if Sberbank still checks insurance companies? The fact is that when insuring life or collateral in organizations accredited by Sberbank, some issues are resolved faster, and most importantly, Sberbank is more tolerant of emerging problems. Also, some insurance companies give a small discount if they have an agreement with Sberbank.
Favorable insurance conditions for mortgages at Sberbank (collateral + life)
Sberbank's policy one way or another forces most borrowers to look for where it is cheaper to insure collateral and life. However, it is not possible to answer this question unequivocally due to the individual conditions for each client of the insurance company. However, using a small example for a mortgage of 2 million rubles, you can understand which insurance organization has more favorable conditions. Also, for clarity, conditions will be presented for both men (35 years old) and women (30 years old) who are office workers and have no health complaints.
The insurance amount is calculated using the formula: mortgage debt (mortgage loan amount) * (life rate + collateral rate).
For example, you take out a mortgage for 2 million rubles. In the insurance organization you have chosen, the rate for life was 0.3% for you, and for collateral property 0.1%. The formula will look like this: 2 million rubles * (0.3%+0.1%) = 8000. That is, you will have to pay 8 thousand rubles a year for your mortgage insurance.
At the same time, not all companies offer official calculators on their websites, but send calculations only upon request. It is very difficult for an ordinary user to independently understand the presented tariff collections - there are too many nuances. When making a decision, it is advisable to contact several insurance companies to compare the results, taking into account individual conditions.
You can insure collateral property in one company, and life in another, while selecting the minimum rates. The table below shows insurance organizations and their respective rates. Again, they can differ significantly for different borrowers, as they depend on many factors.
Waiver of insurance
If you want to reserve the opportunity to refuse life insurance and return the funds spent on it, the first thing you need to pay attention to is what kind of agreement was concluded: collective or individual.
An individual insurance contract is concluded between an individual and a legal entity (client and insurance company). There is a cooling-off period during which you can get a full refund for your insurance. Since 2018, this period has been 14 days (the terms have not changed in 2019). In case of early repayment of the loan, the refund is carried out according to the terms of the agreement. Thus, in Sberbank Life Insurance the redemption amount is calculated using the formula:
- N – full insurance period;
Both variables are calculated in days.
A collective insurance agreement is concluded between legal entities (a credit institution and an insurance company), and the borrower (client) simply joins it. The cooling-off period does not apply to such an agreement. In this case, in order to get the money back for the insurance, you will have to spend time going to court, which, however, does not guarantee any positive result for the borrower. Again, it all depends on how the contract was drafted. For example, for consumer loans and car loans, Sberbank also provides for a cooling-off period, as is the case with an individual insurance contract.
As for early repayment of the loan, there are no specific provisions in the legislation for the return of the redemption amount in the case of a collective agreement.
The procedure for terminating an insurance contract at Sberbank
Insurance rules in the Sberbank Life Insurance company, which is a subsidiary of Sberbank, are regulated by Order No. 134 dated August 15, 2016. It acts, however, only in relation to this organization. However, it is worth paying attention to the fact that the parties to the agreement may agree to change or even completely exclude some of the provisions specified in this order. Well, accordingly, if you insure yourself with another company, the contract will be different.
In the context of the topic of refusal of insurance at Sberbank, paragraph 8 of this order deserves the most attention. It is there that it is indicated how, in general cases, mutual settlements between the parties will be made upon termination of the contract. Why in general cases? Everything is very simple. The insurance company may change some terms of the contract or exclude certain clauses from it, as mentioned above. Therefore, read the contract carefully before signing it.
The insurance contract is terminated before expiration in the following cases:
- The insurance company fulfilled its obligations.
- The policyholder abandoned the contract before it came into force.
- The policyholder refused insurance after the contract came into force and at the same time repaid the loan ahead of schedule.
- The policyholder refuses the insurance contract concluded between the policyholder and the authorized person of the insurer. In this case, the insurer used an analogue of a handwritten signature for signing, and the policyholder used a handwritten signature.
- The policyholder refuses the contract, which was concluded by sending the insurance policy to the policyholder on the basis of an application drawn up in the form of an electronic document. Such a statement must comply with the law of the Russian Federation dated November 27, 1992 No. 4015-1.
- The policyholder cancels the contract during the cooling-off period (14 days from the date of conclusion of the contract).
- It is automatically terminated in case of non-payment or incomplete payment of the insurance premium within the specified grace period.
- By mutual agreement of both parties to the contract.
The full insurance premium is refunded in case of refusal of insurance under clauses 2 and 6. In case of early repayment of the loan, the refunded amount is calculated using the formula:
(Insurance premium paid – (Insurance premium established by the Insurance Agreement * T1/N)) * 50%,
- N – full insurance period;
- T1 – insurance period up to the day preceding the termination date (inclusive).
In other cases, the insurance premium will most likely not be returned, at least without the intervention of an experienced lawyer.
Against the background of the above rules, the question naturally arises: who are the policyholders and insurers? For a specific case, namely mortgage insurance at Sberbank Life Insurance, the following definitions can be given:
- Policyholder. In the case of an individual agreement, this is the Sberbank borrower who is insured for the mortgage. In the case of a collective agreement, this is Sberbank itself, while the borrower, with his consent, acts as a third (insured) party.
- The insurer is Sberbank Life Insurance.
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