Which government requires insurance on a private home?
Mortgage lenders make homeowner's insurance a condition of the loan to protect their assets. I've never heard of a state requirement for homeowner's insurance.
I'm in the US, though. Might be different elsewhere.
Shared ownership properties, such as flats in tenements in Scotland and the UK (known as condominium ownership in the US, I think) require buildings insurance, as a fire or other damage to the fabric will affect other parts of the property.
This is codified in law by parliament as the Tenements (Scotland) Act 2004, Section 18, Obligation of owner to insure - http://www.legislation.gov.uk/asp/2004/11/section/18
Re:Mercury Spill
by imjustsaying on Friday October 09, 2015 @02:58AM
(#10358550)
It also makes sense that a bank would require a homeowner to have insurance. The bank gets all the benefits and the homeowner takes all the risks, in the form of payment costs and CLUE report liability.
Who are these "mortgage lenders" you speak of? It's all Fannie Mae and Freddie Mac and they set the underwriting requirements which include property insurance.
[1] - https://www.fanniemae.com/content/guide/selling/b7/3/02.html
OK, fine; I am speaking of those entities who originate and collect payment on a home loan. You pointed me to a government-sponsored enterprise that places an insurance stipulation in the terms of its voluntary contract with lenders who wish to guarantee or pass-through their loans.
Granted, almost no one will originate a subprime loan these days, because everyone in the private-label MBS business got out or was bailed out, so the best this example shows is a de facto standard set by the guarantor of last resort.
Re:Mercury Spill
by cowsandmilk on Friday October 09, 2015 @08:14AM
(#10359489)
I own a non-warrantable property where Fannie Mae and Freddie Mac will not buy the mortgage. The bank still requires property insurance. Property insurance is not something invented by them that banks would not require otherwise.
Fannie Mae and Freddie Mac manage only about 40% of the mortgage market in the United States. Now, that's big enough to have a significant effect on the entire rest of the market but they do not control the entire mortgage market.
Unfortunately, just like for many things, government makes it mandatory to buy insurance for many of your properties. So the scam can go on and on forever.