Can anyone tell me if it the "norm" that a "Property in Possession" Insurance Premium is charged to my shortfall after my home is reposessed? If a claim is made on this insurance for a fixture which was damaged or stolen while in the possession of the lender, should any proceeds be credited to my shortfall?

Do all lenders take out this insurance (which added over 300 to my shortfall)when they repossess a house?

Any info/advice anyone?

-- hanging in there! (, September 15, 2002


Firstly most mortgage lenders stipulate in their terms and conditions (which you will have agreed to when signing your mortgage offer) that 'you' are responsible for any incured costs in respect of the property until they have sold it, also most stipulate you accept these will be added to your balance and interest added.

A. An insurance claim would in most cases result in repair of the fixture claimed and therefore any proceeds paid would be spent in bringing the property back to its pre insurance claim state.

A. Unless you have evidence of abuse i.e. a claim was made and no repair or replacement of a fixture took place, then regretably this would be a very difficult area to challenge.

A. Yes, lenders do charge insurance fees after repossession.

Look for anomalies within a SARN : -

Was the insurance fee debited for a high amount i.e. a year, and the lender sold your property within a few months and no insurance claim was made - it could be that an insurance credit / rebate was due.

Best of luck

-- Paul Adamson (, October 07, 2002.

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