Mortgage Insurance - Insurance Programs for Bank Borrowers
Mortgage Insurance is a special type of insurance intended for people who acquire mortgaged real estate. Insurance is a mandatory condition in the purchase and execution of a contract between you and the bank.
What risks will be insured?
Real property may be insured under the following risk package:
- fire and smoke, gas explosion
- damage caused by water or other liquids
- unlawful acts of third parties - robbery, hooliganism, vandalism
- theft, robbery
- lightning, natural disasters, excluding earthquake
- downfall of manned aircraft, trees or other foreign objects, crash, collision, impact shock of land vehicles or self-propelled machines.
For Accident Insurance:
- death of the insured person (the borrower) that occurred as a result of an accident within 12 calendar months from the date of accident;
- permanent disability of the insured person (the borrower), with the establishment of disability group caused as a result of an accident;
Bank Borrower title insurance:
- Risk of loss of ownership of real property due to:
- errors in the documents of title to the property during execution thereof;
- violations of the RK legislation in force at the conclusion of the previous property sale contracts;
- property sale contract execution with a person with limited powers and/or that has no right to do so;
- execution of sale and purchase contract with an unincorporated legal entity;
- execution of sale and purchase contract in violation of the rights of minor owners;
- entering into sale and purchase contract in conflict with applicable laws of RK;
- entering into a contract of sale under the influence of third parties, as a result of misrepresentation.
The following shall not be accepted for insurance:
- rundown and dilapidated buildings;
- wooden reed-framed, adobe house;
- unfinished projects;
- buildings in the immediate vicinity of the unfinished projects;
- brick, stone, concrete structures – built before 1960.
Amounts of indemnity payments:
For risks associated with title insurance in the amount of actual damages less straight deductible, but not exceeding the sum insured.
For risks arising in connection with an accident insurance indemnity is paid in the amount of (as a percentage of the sum insured), but not more than the principal amount of debt:
- in case of death -100%;
- in case of disability of Group 1 – 80%;
- in case of disability of Group 2 – 60 %;
- in case of disability of Group 3 - 40%;
For risks associated with title insurance in the amount of actual damages less strteaight deductible, but not exceeding the sum insured.
Necessary documents for execution of the mortgage insurance contract:
- identity card, passport with IIN or certificate of registration of a legal entity;
- technical passport;
- loan agreement and/or contract of pledge;
- application form.
Copies of these documents are an integral part of the insurance contract.
What will be insured?
- Structural components of premises/buildings (including window and door structures (except interior ones), heating, water supply, sewerage, gas supply systems piping;
- Finishing of structure, namely all kinds of plastering and painting works, including stucco work; wall cladding, ceiling, floor, interior door designs, including glass-setting, interior window design; built-in furniture;
- Technical equipment: atypical heating, surveillance and protection, ventilation, air conditioning, water, sewer, gas, power systems and more.
- a sudden, short-term event (occurrence) that occurred contrary to the will of man as a result of external mechanical, electrical, chemical, or thermal effects on the body of the insured person, entailing harm, bodily injury or death, unless otherwise provided for by the insurance contract.
When buying real estate, especially in the secondary market, the question of clean title of the sales transaction is very relevant. Almost any transaction on the secondary housing market may be challenged. In this situation, your ownership (title) insurance in the event of loss of property rights to the collateral property becomes a necessity.
Title insurance contract provides protection against loss of property as a result of termination of ownership of that property on the basis of a legally effective court decision.