No, property insurance is not mandatory for getting a home loan. At least there are no government mandates enforcing the same. That means you can opt for a home loan and simultaneously decide not to purchase home insurance.
That being said, banks push their customers to purchase property insurance along with their home loan agreement. This is usually done to enhance the safety profile of the bank.
Although it is not mandated by the law to buy a home insurance policy when you opt for a home loan, every bank has the right to formulate its own loan disbursement policy. It can decide to whom it wishes to provide a loan and to whom it does not. Thus, there are banks that could disburse a home loan only if you purchase a home insurance policy along with the loan.
If you feel you do not need home insurance, and the bank is adamant about you getting it, you may choose to find a different bank for your home loan requirements.
Both, IRDA and RBI have not mandated home insurance in any capacity whatsoever. It is not mandatory to buy home insurance for your existing home or even a new home. Certain banks misrepresent this by stating that it is mandated by the RBI or IRDA. This is not the case and such statements are baseless in nature. IRDA and RBI are clear on this matter, there is no compulsion to purchase home insurance in any capacity.
Although buying home insurance is not mandatory, there are various benefits attached to doing so. Mentioned within are some of them:
Peace of mind: A home insurance policy provides peace of mind to the policyholder. No more sleepless nights.
Protection against fire: Fires can occur in urban environments. A home insurance policy can protect against any losses that might occur due to fires.
Protection against theft: A home insurance policy can protect against thefts and robberies.
Protection against natural calamities: A home insurance policy can provide coverage against floods, tsunamis, earthquakes, landslides, etc.
Third-party liability protection: The insurance company will provide compensation to anyone who has been damaged due to you.
These benefits make it prudent for you to consider buying a home insurance policy.
Are you looking for a new insurance policy or a policy renewal? Reach out to us and let us assist you.