Outside the banks · security · insurance requirements
Financing property without a bank, for private individuals
Anyone financing property outside a bank deals with a lender that arranges its security differently. The insurance requirements that follow are stricter than for an ordinary residential mortgage.
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- 9.5 customer rating for a new policy
- AFM licence 12016589
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Deze pagina in het Nederlands: Bankvrij vastgoed financieren voor particulieren.
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
Bank-free finance means that the money comes from a provider other than a mainstream mortgage lender: a private investor, a family member, a specialist property financier or a group of lenders through a platform. For the finance itself we refer you elsewhere. We are insurance advisers and not credit brokers. See also mortgage and non-bank property finance.
What we do help with is the set of policies the lender requires as a condition. The deed almost always states that the security must be insured against fire and other perils, and that the lender is noted on the policy as an interested party. That last point is not a formality: it ensures that a payout is not applied without the lender's knowledge. If the note is forgotten, that is a breach of the loan conditions, even if the property is properly insured.
The most common mistake among private individuals financing a property in their own name is insuring on the wrong business activity. A home you let is not owner-occupied. If the policy schedule says you live there yourself while tenants are in place, the situation differs from what was declared, with the consequences of Article 7:930 of the Dutch Civil Code. So look at buildings insurance for a home that is let.
This page deals with one situation. The full overview is on Mortgages: we refer you on.
What the policy does not solve
Four provisions which, with privately financed property, regularly leave you with an unexpected loss to bear.
Vacancy is a matter to be disclosed
As soon as a property stands empty for longer than the period stated in the policy, cover generally falls back to a limited set of perils: fire, storm and lightning strike, but no water damage, no vandalism and no burglary damage. Report vacancy immediately, even if it is temporary between two tenancies. Anyone who does not report it discovers at claim time that in effect only a fire policy was in place.
Liability as owner is separate
If a roof tile falls onto a parked car or a visitor is injured by a loose handrail, you are liable as possessor under Article 6:174 of the Dutch Civil Code. That strict liability applies even if you did nothing wrong. Buildings insurance pays for the damage to the building, not the injured party's claim. For that you need liability cover for the property.
Deferred maintenance and gradual effects
Rotten window frames, a leaking roof covering, penetrating damp and foundation damage caused by subsidence are excluded virtually everywhere. Insurers cover sudden and unforeseen events, not a backlog of maintenance. So with a property you buy using finance from a private provider, a structural survey beforehand is not only a pricing tool but also the basis for the question of cover.
Illegal use by the tenant
Damage caused by a cannabis farm, a drugs laboratory or other illegal activity by a tenant is excluded as standard, even if you knew nothing about it. The result is that you are left with the repair costs while the loan continues. Limit that with thorough tenant checks, a tenancy agreement with a right of entry and periodic inspections. Record the inspections, because that record is your only evidence.
What does your premium depend on?
- Construction type and roof covering: brick with a hard roof covering counts differently from timber or thatch
- Use of the premises: owner occupation, letting or mixed use
- Rebuild value: the basis for the sum insured, not the purchase price
- Year of construction and state of maintenance: age affects both acceptance and premium
- Security fitted: burglary resistance and fire detection count
- Number of properties in the portfolio: a combined policy is assessed differently from separate policies
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | Extended | Comprehensive |
|---|---|---|
| Fire after a short circuit in the meter cupboard of the let property | Yes | Yes |
| A storm lifts the roof tiles from the rear building | Yes | Yes |
| The decorator knocks over a bucket and damages the plasterwork in the stairwell | No | Yes |
| Graffiti on the front facade after a weekend | No | Provided that |
| The window frames on the south facade have rotted through from the inside | No | No |
| Subsidence of the foundations after a series of dry summers | No | No |
Your lender reads these columns too: the loan conditions often state which of the two it requires as a minimum.
Frequently asked questions
This is what people ask us most.
Does Finass arrange the finance itself?
No. We are independent insurance advisers and broke insurance, not mortgages or other credit. For the finance we refer you to a firm that specialises in it. We do arrange the policies the lender requires as a condition and make sure they match the wording in the loan agreement.
Why does the lender ask for the rebuild value and not the purchase price?
The purchase price includes the land and market conditions. Those do not disappear in a fire. Rebuild value is the amount needed to put the same building up again. If you insure for too low an amount, a proportionate reduction follows: with fifty per cent underinsurance you receive only half, even on a small claim. Conversely, Article 7:960 of the Dutch Civil Code prevents you from receiving more than the loss suffered.
What happens to the payout when there is a claim?
If the lender is noted on the policy as an interested party, it is involved in the payout for a substantial loss. In many cases payment is made against proof of repair or directly to the contractor. That protects the lender against a situation in which the security disappears and the money ends up elsewhere. Agree in advance how that route works.
Do I need to report a renovation?
Yes. Refurbishment changes the risk and often the rebuild value as well. Restrictions also apply during the work: damage caused by the contractor, an open roof or missing glazing generally falls outside the buildings cover. Report your plans in advance and have it assessed whether a separate construction policy is needed. Changes that are not disclosed fall under Article 7:928 of the Dutch Civil Code.