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Lenders often misguide the housing loan borrowers and talk them into purchasing housing loan insurance products. Several finance organizations say these products are mandatory and force buyers to pay an additional amount for the premium. But is insurance mandatory for home loan? Read below to know:
Is Property Insurance Mandatory for Home Loan as per RBI
Let me tell you that it isn’t mandatory to purchase a housing insurance policy from a bank to get a home loan. There isn’t any compulsion by the RBI or the IRDA (Insurance Regulatory and Development Authority) for housing loan applicants to purchase insurance from banks.
Officially, your bank can’t force you to buy property insurance from them. Moreover, using the name of IRDA or RBI is misinformation.
However, the banks don’t hesitate to force you to purchase property insurance from them because they may want to safeguard their self-interest in case you could not repay the home loan. Additionally, they may insist you purchase housing insurance from them because they usually have a tie-up with insurance companies. So, when they convince you to purchase their property insurance from their collaborating insurer, they earn commissions.
I hope you like my answer on “is property insurance mandatory for home loan in India”
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Authors Of The Question
Is property insurance mandatory for home loan?
Nikhil
1809Views
3 Year
2021-09-28T17:02:49+00:00 2021-09-28T18:35:58+00:00Comment
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