Lenders will insist that the property is adequately insured, with a suitable Buildings Insurance Policy, as it represents security against the mortgage debt.

A buildings policy covers against storm damage, fire, flooding etc and relates to the fabric of the house or flat etc.

It is normal for lenders to check that any policy arranged is adequate and a fee will sometimes be levied to check the policy, if the borrowers take a policy other than the one sold or recommended by the lender.

In addition, borrowers will need a Contents Policy that provides cover for the contents, such as carpets, TV´s, furniture etc.

Most lenders and insurance companies offer a combined Buildings and Contents Policy.

In the past some lenders have made their insurance compulsory with some very competitive mortgage products although this is less common now.

Another form of insurance common in the mortgage industry is a Mortgage Payment Protection Plan.

This policy is designed to offer income protection against unemployment, sickness and redundancy.

This form of insurance has become more important as the Department of Social Security has steadily withdrawn the benefits available.

This form of insurance is not compulsory.

Another form of insurance is Mortgage Indemnity Guarantee.

For more information about Insurance, contact one of our independent advisers.