A different lender · pledged payout · rebuild value
Non-bank property finance
If the money for your property does not come from a bank, that changes nothing about the property itself, but it does change who has a say once there is a loss. The payout is then rarely yours alone.
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Deze pagina in het Nederlands: Bankvrij financieren van vastgoed.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
- We compare the offerings of several insurers
- An adviser checks whether the cover suits your activities
- We arrange the switch, including cancellation
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
Non-bank finance means the money comes from a party other than a regular lender: an investor, a family member, a specialist property financier or several participants through a platform. Finass is an insurance adviser and not a credit intermediary. For the loan itself we refer you on. See mortgage, non-bank property finance and financing property.
The point most often underestimated with non-bank arrangements concerns the claim payment. Under Article 3:229 of the Dutch Civil Code, a right of mortgage or pledge automatically carries a right of pledge over the claims that take the place of the encumbered asset. The payment for a property that has burned down is such a claim. In reality that means: with a large loss, your financier has a say in whether the money goes to repair or to repayment of the loan. Anyone who only discovers this after the fire loses weeks.
The second point is the sum insured. Buildings insurance pays out on the basis of rebuilding costs, not on the basis of what you have borrowed or what the property is worth on the market. Article 7:960 of the Dutch Civil Code provides that a payout may not produce a benefit. The outstanding debt is therefore not the yardstick. Have the rebuild value substantiated and make sure there is an index clause, otherwise you run into underinsurance. See also buildings and structures.
This page deals with one situation. The full overview is on Mortgages: we refer you on.
Four points that make the difference
With a non-bank financier the emphasis lies on different parts of the policy than with an ordinary residential mortgage.
The payout is not automatically yours
Through Article 3:229 of the Dutch Civil Code the claim payment falls under your financier's security right. With larger losses, insurers therefore ask for a statement from the mortgagee before they pay. Agree in advance on the conditions under which repair takes precedence over repayment, and make sure the insurer knows who that party is. With several lenders that is a real source of delay.
Rebuild value, not the outstanding debt
Insurers reimburse the cost of repair or rebuilding. If debt remains after a total loss because you borrowed more than the property costs to rebuild, no buildings policy resolves that. An incorrectly stated rebuild value also feeds through into underinsurance: you receive proportionately less, even on a small claim.
Deferred maintenance and inherent defect
Rotten woodwork, a roof that was due for replacement, subsidence and construction defects are not sudden events. Damage arising from them is excluded, as is gradually acting damp. With properties financed outside the banks this arises more often, because objects are quite often bought that a bank was precisely not willing to finance. Have the structural condition recorded in advance.
What you must disclose on the application
Earlier claims, a criminal record, the actual use of the property and the existence of several loans are facts the insurer asks about. If you answer incompletely, the insurer can rely on Articles 7:928 and 7:930 of the Dutch Civil Code and reduce or refuse payment. Damage through intent or recklessness falls outside cover in any event under Article 7:952 of the Dutch Civil Code.
What does your premium depend on?
- Construction type and roof covering: brick with a hard roof covering counts differently from timber or thatch
- Actual use of the property: owner occupation, letting or business use
- Rebuild value and indexation: the basis for the premium and for the payout
- Prevention and security: locks, smoke detection and electrical inspection
- Claims history of the property: earlier fire, water or burglary claims
- Excess and number of properties: several properties on one policy changes the structure
Insurers weigh these details differently. That is where your saving is.
Who arranges what
| Situation | At Finass Verzekert | With the provider |
|---|---|---|
| Your financier requires, before completion, a policy schedule naming it as an interested party | Yes | No |
| The rebuild value turns out to be too low and you run into underinsurance | Yes | No |
| A passer-by is injured by a facade panel coming loose | Yes | No |
| The property burns out and the insurer wants to know who is entitled to the payout | Yes | Yes |
| The amount, interest rate and term of the loan itself | No | Yes |
| The market valuation the investor needs for its file | No | Yes |
We arrange the insurance side. For the loan itself we put you in touch with a party that acts as intermediary in it.
Frequently asked questions
This is what people ask us most.
Does Finass arrange the non-bank finance itself?
No. We are an insurance adviser and do not act as intermediary in credit. For the loan we refer you to a party set up for it. What we do is arrange the insurance required under the loan conditions, and check that the description on the policy schedule matches what actually happens with the property.
Why does my lender want to be named on the policy?
Because its security extends, under Article 3:229 of the Dutch Civil Code, to the compensation that takes the place of the property. If it is known to the insurer, payment after a large loss goes through more quickly and with less discussion. Without that entry, the insurer often waits for written consent before transferring anything.
Is my outstanding debt covered if the property burns down?
No. Buildings insurance reimburses repair or rebuilding, not the amount of your loan. Article 7:960 of the Dutch Civil Code does not allow a payout to put you in a better position than before the loss. If the finance is higher than the rebuilding costs, that difference is at your expense. That is a finance question and not an insurance question.
What if I do not report the use of the property?
A property shown on the policy as your own home but in reality let or used for business purposes differs from what was declared. The insurer can then rely on Articles 7:928 and 7:930 of the Dutch Civil Code. So report a change straight away; building work, prolonged vacancy or a new tenant also fall under this.