Is house insurance a requirement?

[dreamur]

I think you are referring to the mortgage redemption insurance (mri) which is different from fire/lightning. This is to protect the bank (and your family) in case something bad happens to you. You have to pay this every year and in most cases your bank offers the best rate because they are protecting their interest.

[james00112233]

Mortgage Redemption Insurance (MRI) is a life insurance policy taken by a mortgagor to repay the balance on a mortgage loan if he dies before its full repayment.
Computed as follows:
MRI Premium = Loan Amount / 1000 x 4.43
i.e. for 1M loan the premium is P4,443.00 per annum

Is this the only requirement by the bank and not the fire/lightning?

[swankydewd]

Is this the only requirement by the bank and not the fire/lightning?

When I got housing loan thru a bank, they required me to have an MRI and Fire Insurance.

The MRI is like a life insurance but the benefactor is the bank. During your payment term, just in case something happens to you, this MRI will cover the remaining balance of your loan, leaving your beneficiaries with the paid property and not an unpaid mortgage.

The fire insurance is for... fire =). Would you still be paying for something that you can't use? Here's a scenario, lets say a fire broke out and the property was totally engulfed, you would rather spend your money to more immediate things like temporary shelter, food and others as compared to paying your mortgage, right?

Also, in my bank, i'm not obliged to get the insurances from them. I can get it from other institutions as long as i give them the required docs. But for convenience's sake, i got it from their sister company.

[_Qwerty_]

di naman masyadong malaki to.. required talaga yang MRI and Fire Insurance kahit sa pag-ibig..

[vinj]

Yep, it's required since you have to protect the property mortgaged. Hindi naman kamahalan as compared to car insurance from what i know.

[yebo]

yes, the banks will require fire/flood/aoG insurance plus MRI. the MRI is both for the bank's and your family's protection. should something happen to you (the bread winner) then the mortgage is paid up by the insurance, the bank does not lose money, and more importantly your family keeps the house.

[james00112233]

I was assuming that the insurance and the MRI has the same amount or much more, compare to the car insurance...