New research from Datamonitor shows 6.9 per cent of mortgaged homeowners do not have any insurance in place.
In order to take out or change a mortgage, customers are required to have adequate insurance – at least covering the building – because if anything happens to the property the chances of recovering the mortgage value are very slim.
Patricia Davies, lead analyst, general insurance at Datamonitor, says right now there’s no process in place to ensure that insurance cover is maintained.
“However, banks and building societies could put a simple process in place to address this, for example, by asking customers to submit their policy details each year.
“Such an approach would ensure ongoing cover as well as providing banks and building societies with insurance cross-selling opportunities.”
Lenders who don’t take a firmer stance are leaving themselves vulnerable to losses and missing out a chance to sell more, she says.
