Do I Need Home Insurance With a Mortgage?

Caeva O'Callaghan | September 4th, 2023

When you buy a house, most mortgage lenders will insist that you have buildings cover in place to protect their investment.

When you take out a mortgage, check the small print. It’s likely that your mortgage company has stated that you have buildings insurance in place to cover the structure of the building, as well as any permanent fixtures.

In this article, we’ll answer these questions:

  • Do I need to have home insurance when I take out a mortgage?
  • Is home insurance mandatory?
  • Do I need buildings cover if I rent my home?

Home insurance and the law

It’s not a legal requirement to have home insurance in place. However, when you buy a property, it more than likely will be a requirement that you have buildings cover in place before you can draw down your mortgage.

This is because houses are expensive investments, and bills for structural or permanent fixture damage can run to tens, if not hundreds of thousands of Euro depending on the damage caused and cost of re-instating the house to its pre-damage condition.

Paid off your mortgage? Nice one! But even if you own your home outright, it’s critical to get buildings and contents insurance. There’s no legal obligation, and no mortgage lender telling you to take out home insurance, but your home and its contents are precious. So, it’s best to have peace of mind and not risk losing everything if a disaster occurs.

Moving house

You found the perfect place – congratulations! But the time to organise home insurance should be now, not later.

You might hear that you don’t need to buy home insurance until the house purchase is completed. This is false. You’ll need it from the date contracts are exchanged. Make sure your buildings insurance is in place for your contract exchange date, because that’s when the house becomes your legal responsibility.

If this is your first house, or your first time buying home insurance, you’ll need a few things to hand to get an accurate quote, which your estate agent should be able to tell you:

  • the address
  • the year your house was built
  • building materials
  • how many smoke alarms, and any other relevant information

Insurance from your mortgage provider

When you take out your mortgage, your provider might offer you home insurance as well. It’s convenient to do so – but it might not be your smartest option. Some mortgage lenders offer home insurance from the same company, and some work with preferred partners.

Taking out home insurance and a mortgage with the same provider may seem like the most hassle-free approach.  But as a home insurance broker we always recommend shopping around for your insurance. We compare the market and will help find the insurance that meets your needs. Bear in mind that some mortgage lenders build in the cost of the home insurance into your repayments, making it difficult to actually see the cost of the house insurance.

Mortgage lenders rely on you being overwhelmed by the house buying process. Often, it’s easier to accept the lender’s home insurance quote and tick it off your list, rather than comparing prices. But shopping around is never a bad idea, so give us a call and we can help you compare quotes from multiple providers.

Switching home insurance providers

There’s nothing stopping you from moving home insurance to lower your premiums or take advantage of deals. If you said yes to your mortgage provider’s upsell on buildings and contents cover, only to find a better deal elsewhere later on, you can switch.

Switching is more painless than you might think. It really pays to thoroughly compare quotes to find the perfect policy for you. When you give us a call, we’ll be happy to walk you through the whole process.

Renting and home insurance

If you’re in rented accommodation, it’s still a good idea to get home insurance. The reason why is because “buildings and contents” cover applies to two different things, and as you do not own where you live, you’re only liable for one.

If you rent your property you’ll make payments on the lease, not a mortgage. Because you don’t own the property you’re in, you don’t need buildings cover. Your landlord is legally responsible for sorting that out.

But if you’re a tenant and your property is damaged by fire or flood, you’ll need contents cover to pay for the cost of replacing furniture or personal items.

Again, the law doesn’t require you to have contents insurance. But it could save a lot of heartache down the road.

If you are buying a house, talk to us in with any queries relating to home insurance.

One of the main benefits of using a broker for your home insurance is that you can consult us with any questions you may have. If you have any queries regarding how best to go about sourcing home insurance when you are purchasing a property,  feel free to contact us.  We provide immediate professional advice from certified and trained insurance agents. We are here to answer your call; contact us on 0818 224433 or 042 9359051.

You can also get an immediate home insurance quote online with us. We compare home insurance in the Irish market from 12 insurers to get you the right cover for your individual circumstances.  We look forward to hearing from you.

All Information in this post is accurate as of the date of publishing.