Understanding What Is Truly Required
Guide to Contracting Compulsory Insurance
We Want You to Understand What Banks Really Require
What Insurance Policies Are Mandatory for a Mortgage?We Want You to Understand What Banks Really Require
When you sign for a mortgage in Mallorca or the Balearic Islands, the law only establishes one mandatory insurance policy: damage/fire insurance linked to the mortgaged property.
However, banking practices are different: many institutions make mortgage approval conditional on taking out other insurance policies, such as life or extended home insurance.
Perhaps the approval itself is not conditional, but bonuses are applied that create uncertainty in decision-making.
In this guide, we help you understand the difference between what is legally mandatory and what banks require in the negotiation.
However, banking practices are different: many institutions make mortgage approval conditional on taking out other insurance policies, such as life or extended home insurance.
Perhaps the approval itself is not conditional, but bonuses are applied that create uncertainty in decision-making.
In this guide, we help you understand the difference between what is legally mandatory and what banks require in the negotiation.
Mandatory Insurance vs. Bank-Imposed InsuranceWe Want You to Understand What Banks Really Require
In mortgage transactions, there are different options to choose from depending on your preferences and needs.
For the most part, these revolve around the choice of policies that will be associated with your mortgage.
These are the most common insurance policies that are applied:
For the most part, these revolve around the choice of policies that will be associated with your mortgage.
These are the most common insurance policies that are applied:
Damage/fire insurance: this is the only one that is truly mandatory by regulation.Life insurance: not mandatory by law, but it can be required by the institution as a condition for granting the mortgage.Other insurance (extended home, payment protection, etc.): also not mandatory, although many institutions link them to improve conditions.The Importance of Choosing WiselyWe Want You to Understand What Banks Really Require
Accepting the policies offered by the bank without comparing them can lead to significant extra costs over the life of the mortgage.
We guide our clients so they know all the options, compare coverage, and choose with confidence.
We guide our clients so they know all the options, compare coverage, and choose with confidence.
Common Cases in Mallorca and the Balearic IslandsWe Want You to Understand What Banks Really Require
Young buyers who are unaware of the difference between mandatory and recommended insurance.Families who sign up for policies without knowing they can change them the following year.Foreign investors who are unaware of local conditions and sign up for more expensive insurance than necessary.
At AvalTeca, we do not act as brokers or sell insurance. What we do is orient and guide the client so they know what they are signing, what they really need, and how to negotiate with the bank to avoid taking on unnecessary expenses.
Your opinion is the most important thing
Customer Testimonials
We were fortunate to have Jordi as our mortgage broker, and we could not be more satisfied. From the first moment he offered us a close, clear and professional treatment. He accompanied us throughout the mortgage process, resolving every doubt quickly and efficiently, and today we have been able to complete the purchase of our home thanks to his excellent work. Totally recommended!
Francisco José Copete García
A very good experience with the personalized treatment Jordi gives his clients. You quickly build trust with him, as if he were your trusted friend. Many thanks to Finance Luxe Group for helping my wife and me get the house we wanted. 100% Recommended
Marc Manrique
We went to ask for information because we wanted to build our house with a mortgage. They have guided me in both the mortgage and the appraisal. Totally recommended, especially a special thanks to Jordi.
RT Abogados y Asociados
I want to thank all the advice I received to acquire my first house. From the first communication, Jordi was fully aware of every detail, resolving all my doubts and accompanying me in the process. In less than 29 days he managed my mortgage with the best possible conditions. The most important thing is that he showed me great responsibility, commitment and professionalism. Do not hesitate to consult him. People like Jordi are much needed in our society.
Alicia Franco
Thanks to their services we were able to have the mortgage at 90% with an interest rate of 2.25. Great professionalism and very attentive at all stages.
Rafa Morales Alguacil
Your Peace of Mind is Our Goal
At AvalTeca, we accompany residents and investors in Mallorca and the Balearic Islands to better understand every step of their mortgage.
A home should not become a burden due to a lack of knowledge about the conditions. We guide you to make smart and secure decisions.
A home should not become a burden due to a lack of knowledge about the conditions. We guide you to make smart and secure decisions.
Frequently Asked Questions (FAQs)
If this FAQ section doesn’t answer your questions, don’t hesitate to contact us.
Is it mandatory to have insurance to get a mortgage?
Legally, only home fire insurance is mandatory, although banks often require more as a condition for granting the mortgage.
Can I freely choose the insurance company?
Yes, as long as the insurance meets the minimum required coverage.
What is the difference between mandatory and tied insurance?
Mandatory ones are required by law; tied ones are those the bank asks for as a condition, even if they are not strictly legally required.
Does AvalTeca sell insurance?
No. Our service is to guide the client to make informed decisions about their policies.