Quarter of mortgage holders wrongly think they must buy home insurance from their lender

One in four Irish mortgage holders mistakenly believed they were required to purchase their home insurance through their mortgage lender when buying their home, a survey has shown. This leaves borrowers open to the risk of overpaying for home protection by failing to check out their options in the market, says insurance broker Gallagher in Ireland, which commissioned the survey by market research firm iReach. The survey of 1,000 adults around the country found that more than half of mortgage holders bought their home insurance through their mortgage lender. While most did so because they believed it was a prerequisite, 20 per cent said they did so because it was more convenient, while 8 per cent believed their lender offered the best price.“There are a lot of moving parts when buying a home. Between getting mortgage approval, dealing with solicitors and trying to meet drawdown deadlines, it’s understandable that many people simply take the home insurance option offered by their mortgage lender without giving it much thought – even though it might be costing them to do so,” said Geraldine Kelly, head of personal lines insurance at Gallagher in Ireland. READ MORE“But it’s concerning that almost one in four mortgage holders believed they were actually required to go through their lender for their home insurance. Banks can often be more expensive on products like home insurance because it’s not what they specialise in – rather it’s an add-on to their main business offering, so they are often not as competitive as other providers. As a result, homeowners could be overpaying on insurance due to this common mortgage myth.”Gallagher said homeowners should shop around before making a decision on home insurance and focus beyond the premium to check what’s covered – including policy limits, excesses, exclusions and optional extras – to make sure the policy meets their needs.Homes also need to be insured for the correct rebuild cost and owners should review their policy every year, rather than simply allow their coverage to renew automatically, it added.