Can the banks oblige you to take out insurance with them?

With current interest rates at an all-time low and debtors on the rise in addition to raised commissions, traditional banking business is under pressure. As a consequence banks are looking for new lines of business in which they do not specialize in order to compensate for their losses.
It is already common practice that when applying for a Mortgage Loan, Personal Credit or ICO, for freelancers and Companies, the bank “offers” insurance in order to “qualify for the loan”.

It is ILLEGAL to link a credit operation to any insurance, the client is free to contract insurance with the Insurer of their choice, who offers the best conditions without any change to the loan conditions. “(Mortgage Law and RD Distribution of Insurance)”

Let’s not forget that banks are not Insurance Specialists, they work with an Insurer, their main focus is economics and not customer advice or service.

The bank is hardly going TO GIVE YOU AFTER SALES SERVICE IN THE CASE OF A CLAIM, when in fact they fall short on banking customer care.
Note, the RD Insurance Distribution Law obliges the Insurance Distributor to provide this after-sales service.

With Mortgage Loans, the practice of “combining” insurance when contracting a Loan is widespread under the pretext of a higher credit rating.

You may actually pay less or the same with a Broker, however a Broker will personalise your insurance requirements and not just those of the bank (obligatory cover for building), in addition and more importantly a Broker will provide you with SERVICE WHEN YOU HAVE A CLAIMAND AFTER SALES CARE.

Mortgage Law only allows banks to oblige the borrowers of a mortgage loan to contract damage insurance to the property, this cover is contracted through a multi-risk home insurance. As previously stated, the client can choose with which Insurer and under what conditions to insure their property. At no time will the bank be able to change the loan conditions for this reason.

In conclusion, COMPARE and SEARCH the best option for your insurance with a Professional Broker, know YOUR RIGHTS and do not go along with the first thing the bank offers you, consult with an INSURANCE BROKER!