Insurance in Favor of a Bank
When granting a mortgage loan, the creditor bank may require you to provide property insurance in its favor. Property insurance refers to the property that will serve as collateral for the loan.
Typically, the risks that banks require to be covered under the insurance are: fire, natural disasters, flooding due to water supply, sewage, heating and other installations, and earthquake.
Some banks may require the inclusion of other coverages, as well as impose restrictions on the co-ownership of the insurers.
The amount for which the property is insured should correspond to the amount of the loan, the remainder of its principal or the market valuation of the real estate, depending on the bank’s requirement. It is possible that some banks require that the property is insured with specific insurance companies.