At the time of managing a loan with a financial institution, it is very common to require a life insurance o accident insurance of the owner or owners.
Despite the fact that the current reality may indicate the opposite, the truth is that an entity cannot oblige to contract any type of insurance. According to what is regulated in article 5.2 e) Law 26/2006 on insurance mediation, «Private insurance and reinsurance brokers may not directly or indirectly impose the conclusion of an insurance contract.
Insurance is a product that seeks to provide a guarantee of peace of mind for the contracting party, and is an act of personal responsibility, and should not be compulsorily imposed, much less unilaterally by an entity.
Another insurance that is usually required when signing the mortgage, is the home insurance. This type of insurance is only mandatory for the client in the event that the aforementioned mortgage is securitized by the bank (issuance of bonds or certificates to third parties). In most cases, banks intend to make it compulsory to take out home insurance through them, but the client must know that they have every right to choose the insurer and product that most interests them.
In the event that the mortgage so conditions it, a clause of subrogation of rights of the chosen insurance can be made in favor of the financial entity, and it will be able to comply with the legal requirements without major disturbance.