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Insurance Certificate of Currency demand?

Discussion in 'Living Room' started by moyjos, 15th Sep, 2016.

  1. moyjos

    moyjos Well-Known Member

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    has anyone else had this come up.?

    For the first time in 30 odd years of having mortgages our bank rang me today asking for a certificate of currency covering our mortgaged properties. ????

    I asked ???why??? The answer was ..it is a new requirement .
    So I duly sent off the docs...(surprise) a few hours later I got a "friendly" email asking how much our monthly payments were, as they could possibly help with either cheaper rates or added inclusions.

    So... Did I just get scammed by my bank? Or is the "we need currency certificates on file" an actual requirement now.
     
  2. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    Most banks require a certificate of currency as part of the settlement conditions and at a minimum value as stated on valuation report.

    You could technically cancel it after settlement although definitley not recomending that.

    Does seem odd what your bank did and how they went about it. I would feel cheesed off.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Its usually a requirement when taking out the loan, but once it settles I haven't heard of them asking for it again.

    Sounds like a sales scam.
     
  4. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    After 10 years of not asking (apart from prior to settlement), Macquarie asked me for a COC too, which I provided on a couple of properties. It is just banks doing what they should be doing IMO. It is a requirement of the lender providing a mortgage, to ensure the property (and therefore the bank's interest) is insured every year.
     
  5. JacM

    JacM VIC Buyer's Agent Business Member

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    It is a requirement for loan settlement. You will probably find that in the terms of your loan contract you are required to keep the property suitably insured and that if you don't, you are in breach of your loan contract.

    The fact they have called you to ask for proof is weird and perhaps an opportunity to cross-sell. However technically you are in a contract with the bank for the duration of your loan.
     
    Last edited: 16th Sep, 2016
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    The big 4 banks usually don't require an insurance certificate outside of a few fairly broad parameters, but they do reserve the right request a certificate at their discretion. They do maintain that the property be insured as a condition of the loan.

    The second tier lenders generally do request a copy of an insurance certificate prior to settlement. Macquarie certainly falls within this group.

    Either way, it's a moot point. Your property should be insured.
     
    JacM likes this.
  7. moyjos

    moyjos Well-Known Member

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    Thanks all. I agree all properties should (and are) adequately insured.
    I just thought it was strange to get the call.
    It caused only a little hassle with body corporate who had to chase one for the building. they reckon they very rarely get asked for one.
    I didn't appreciate the almost immediate cross- sell though :(
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Make a complaint if you think the purpose was a cross sell as they inconvenienced many people.
     
  9. Perthguy

    Perthguy Well-Known Member

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    I have been asked for this too.
     
  10. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Never had a coc needed apart from refi/loan extension/purchase
     
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Never needed a coc?
     
  12. Brady

    Brady Well-Known Member

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    Interesting - Brokers must not get audited the same way we do direct. CBA requires the insurance policy to be imaged to the application.

    • It's important security owners adequately insure security properties referred to in Item K of the contract schedule under the terms of the mortgage: see Memorandum of provisions clause A7.1.
      • The insurance requirement must be stated in the mortgage and other documents.
      • These documents are considered acceptable evidence of a building insurance policy:
        • Certificate of Insurance.
        • Certificate of Currency.
        • Policy Schedule.
    It was likely required - and now they're trying to save you money. Chances are you went onto some sort of package that gives you discount on inhouse insurance. Like any insurance check the policy ensure it's covering what you need and if the price is right proceed. If you're happy with your current insurer send them a 'friendly' - no thank you, happy with current provider.
     
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  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    @Brady from my perspective the CBA doesn't require a certificate of currency unless the property falls outside of certain criteria, usually based on price or postcode. For any lender that requires a certificate, it's a condition of settlement, never at the time of application.

    What is frustrating is when a lender cross sells loan protection insurance. It's rarely a good solutions (income protection is far better) and it usually gets added to the repayment. We've seen approved deals become declined because it no longer services after the loan protection is applied.
     
  14. Brady

    Brady Well-Known Member

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    @Peter_Tersteeg interesting - that was from policy I definitely have to provided COC for all new security applications / purchases & refinances - regardless of price or postcode.

    Hrrmm interesting comment, I sell a little bit of loan protection - but it's only as a intermediate cover as they don't have existing cover in place. They would then see our branch financial planner - yes branch financial planner. Before anyone jumps in - he doesn't just sell CommInsure, he looks after my personal risk insurance it's through Asteron as it was the best cover for me at the time, does the same for my clients - very rare they end up in CommInsure infact.

    CBA's loan protection doesn't get added to the repayment, it's a seperate commitment - would be considered under your MLE.