HDFC Home Loan & Property Insurance

[|V|]

I need some help on HDFC home loan as its the first time I am dealing with home Loan.

The loan is for 40L for a under-construction property.

The sanction letter they shared has following wordings :

• The borrower undertakes to insure the property for full reconstruction value and assign the policy in favour of HDFC Bank Ltd.
• You can avail property insurance from any insurance company of your choice. Customer's participation in this policy through us is entirely voluntary.

I have asked DSA multiple times that I don't want property insurance and he always deflects question; saying it depends case on case basis and all.

Few questions :

1. Is property insurance is mandatory for under construction property ?
2. Can I stand on my ground and reject the property insurance ?
3. Can I ask them to revise the sanction letter to remove above point since I don't want property insurance. Will they revise the sanction letter easily ? I have only received soft copy of sanction letter; haven't signed it yet.

I need disbursement ASAP as the due date for builders demand has already exceeded.

Any experience with HDFC home loan where one had above mentioned condition on sanction letter and didn't get the home loan ?

Many thanks in advance.

 

[arun4455]

I had similar experience with SBI, where SBI asked me to get the property insurance for under construction property. Then I argued that insurance can be taken only if a property exists, and in this case there is no property till builder completes the construction. They agreed and accepted that no insurance would be required till the possession of the property. Post possession, I will see whether should I take the insurance or not.

 

[|V|]

I had similar experience with SBI, where SBI asked me to get the property insurance for under construction property. Then I argued that insurance can be taken only if a property exists, and in this case there is no property till builder completes the construction. They agreed and accepted that no insurance would be required till the possession of the property. Post possession, I will see whether should I take the insurance or not.

Exactly. That's what I thought. I will try telling the same thing to them if they bring this topic.

 

[Zacobite]

I need some help on HDFC home loan as its the first time I am dealing with home Loan.

The loan is for 40L for a under-construction property.

The sanction letter they shared has following wordings :

• The borrower undertakes to insure the property for full reconstruction value and assign the policy in favour of HDFC Bank Ltd.
• You can avail property insurance from any insurance company of your choice. Customer's participation in this policy through us is entirely voluntary.

I have asked DSA multiple times that I don't want property insurance and he always deflects question; saying it depends case on case basis and all.

Few questions :

1. Is property insurance is mandatory for under construction property ?
2. Can I stand on my ground and reject the property insurance ?
3. Can I ask them to revise the sanction letter to remove above point since I don't want property insurance. Will they revise the sanction letter easily ? I have only received soft copy of sanction letter; haven't signed it yet.

I need disbursement ASAP as the due date for builders demand has already exceeded.

Any experience with HDFC home loan where one had above mentioned condition on sanction letter and didn't get the home loan ?

Many thanks in advance.

its isn't mandatory.. go to kotak if they insist.. however.. buying a home insurance and a term insurance for the home / amount if HL us good practice.. but not to assign it to the bank!!!

 

[|V|]

its isn't mandatory.. go to kotak if they insist.. however.. buying a home insurance and a term insurance for the home / amount if HL us good practice.. but not to assign it to the bank!!!

Yeah. I can still think of taking the property insurance if the policy is for me but buying the policy in the name of the bank seems just super awful.
They already have the property as collateral and yet wants us to pay for their insurance.

I will stand my ground and deny the property insurance however do I need to ask them to revise the sanction letter ? Or will they easily revise the sanction letter.

What I mean to say is; what if they agree to my condition of not getting the insurance and proceed with the disbursement, Do I still need to worry that the sanction letter has the condition that I need to ensure the property in their name ?

 

[Zacobite]

talk to them and see..they want your biz.. insurance is gd.. u r still liable to pay emi... buy the insurance on ur name

 

[rishi4]

Have some questions on this guys
Getting a home loan for a constructed policy
Hdfc is forcing to take insurance from them
They mentioned it's a combined insurance where home loan insurance ( if something happens then they'll pay the emi and full amount of loan to the bank) and term insurance is combined and if we take it from outside then it won't be linked to home loan or something
Tried understanding the details but they kept confusing me more
Checked individual term and house insurance on policy bazaar, it's at half the rate of taken separately compared to the quote by them
Need your guidance guys, also is house insurance same as loan insurance?
Which insurances should I take, add ons I should keep in mind and any other detail I should be considering?

 

[Zacobite]

Have some questions on this guys
Getting a home loan for a constructed policy
Hdfc is forcing to take insurance from them
They mentioned it's a combined insurance where home loan insurance ( if something happens then they'll pay the emi and full amount of loan to the bank) and term insurance is combined and if we take it from outside then it won't be linked to home loan or something
Tried understanding the details but they kept confusing me more
Checked individual term and house insurance on policy bazaar, it's at half the rate of taken separately compared to the quote by them
Need your guidance guys, also is house insurance same as loan insurance?
Which insurances should I take, add ons I should keep in mind and any other detail I should be considering?

Pls don't buy from them.. It not only exorbitantly expensive, loan insurance also reduce coverage every yr basis outstanding principal and the policy is endorsed to the bank.

Its not mandatory to buy insurance.. Negotiate or move bank.

 

[rishi4]

Pls don't buy from them.. It not only exorbitantly expensive, loan insurance also reduce coverage every yr basis outstanding principal and the policy is endorsed to the bank.

Its not mandatory to buy insurance.. Negotiate or move bank.

I'm anyways thinking to buy insurance as anyways I've to buy term for myself. I don't have it currently.
I can go with the online route, it's cheaper for sure.
But how can I link it to the home loan?
They mentioned if I take from them then it'll be linked automatically.

 

[arun4455]

Have some questions on this guys
Getting a home loan for a constructed policy
Hdfc is forcing to take insurance from them
They mentioned it's a combined insurance where home loan insurance ( if something happens then they'll pay the emi and full amount of loan to the bank) and term insurance is combined and if we take it from outside then it won't be linked to home loan or something
Tried understanding the details but they kept confusing me more
Checked individual term and house insurance on policy bazaar, it's at half the rate of taken separately compared to the quote by them
Need your guidance guys, also is house insurance same as loan insurance?

Both are different insurance. house loan is primarily if something happens to the property, while loan insurance is for if something happens to you.

Which insurances should I take, add ons I should keep in mind and any other detail I should be considering?

Loan insurance is always optional, the bank can never force you. For house insurance, few banks mandate to get the house insurance, which is available at a very cheap price outside. The bank can't force to buy from themselves. You can buy from anywhere.

 

[cesc007]

Loan insurance is optional specific for hdfc, i do have a loan with them and i didn't get insurance,

 

[rishi4]

Understood
Thanks guys
So I've decided to take the house insurance from policybazar with SBi (it's coming as most reliable) anyways house insurance is costing somewhere 280ish per month only
Second I'm planning to take term insurance and link it to home loan. (Have to take term insurance anyways for myself)
Same for this as well, going via policybazar route as they are quoting it cheaper and this time going with hdfc insurance only. So home loan and term insurance both will be from hdfc. Just a difference of 100/month b/w icici and hdfc so why not keep loan and insurance with the same provider
That's what I'm planning currently, not taking any loan insurance as such. As it'll be anyways taken care of in case of any issue by term insurance.
Guide me if I'm missing something here or anything that I should be vigilant about in this process. Have to finalize this by this week for loan to get disbursed.

 

[|V|]

I'm anyways thinking to buy insurance as anyways I've to buy term for myself. I don't have it currently.
I can go with the online route, it's cheaper for sure.
But how can I link it to the home loan?
They mentioned if I take from them then it'll be linked automatically.

This linking Insurance to a property is more of a gimmick and not worth extra money.
For HDFC, I threatened them to move my loan to elsewhere and they backed out. Didn't force the insurance.

 

[rishi4]

This linking Insurance to a property is more of a gimmick and not worth extra money.
For HDFC, I threatened them to move my loan to elsewhere and they backed out. Didn't force the insurance.

Acha
Then what if something happens then the loan dependency will be to other family members
Just want to make sure that nothing get stucked

 

[Toofani]

This linking Insurance to a property is more of a gimmick and not worth extra money.
For HDFC, I threatened them to move my loan to elsewhere and they backed out. Didn't force the insurance.

Hi, I am on the same boat as you. The HDFC representative says that you don’t have to opt for insurance but he is not removing the Insurance point from the sanction letter, he is saying that this are standard terms and conditions and we can’t change them. I am taking a plot loan from HDFC. Did they remove the Insurance point from your sanction letter or they said the same to you?

 

[drbhavesh]

I with icicic forced to take insurance I denied but they insist as they get commission..and they said if not take insurance they take full processing fee other wise half processing fee.i take insurance from them ...then during freelocking period of 15 day as I get disbursement within 15 day I call customer care and tell the story and ask to cancel as I m in free locking period..they cancel it refund come into loan account .

 

[|V|]

Hi, I am on the same boat as you. The HDFC representative says that you don’t have to opt for insurance but he is not removing the Insurance point from the sanction letter, he is saying that this are standard terms and conditions and we can’t change them. I am taking a plot loan from HDFC. Did they remove the Insurance point from your sanction letter or they said the same to you?

They didn't remove it. I threatened to back out of the loan then they backed off.