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Insurance Requirements

Insurance Requirements
  • Accepted insurance companies
  • Private residential property insurance requirements
  • Corporate real estate insurance requirements

Accepted insurance companies

Insurance companies accepted by Luminor across Baltics

Luminor across Baltics accepts insurance contracts issued by following companies and their branch offices:

  • Lietuvos draudimas AB (incl. PZU Kindlustus as AB “Lietuvos draudimas “Eesti filial)
  • AAS BALTA
  • Balcia Insurance SE
  • If P&C Insurance AS
  • ERGO Insurance SE
  • Seesam Insurance AS
  • ADB Gjensidige
  • Compensa Vienna Insurance Group ADB
  • AAS BTA Baltic Insurance Company
  • Swedbank P&C Insurance AS

Insurance companies accepted by Luminor with conditions

Following insurance companies are accepted with conditions:

Insurance company Location/market Accepted insurance lines Value limit (incl. VAT) for object
SALVA Estonia only All No limit
BAN Latvia only All No limit

Private residential property insurance requirements

Objective

Insurance requirements set minimum rules to be met when insuring real estate as collateral for housing loans. Insurance requirements minimise risks caused by sudden, unexpected and unforeseen events (insurable risks) to the collateral.

Insurance requirements ought to be met in process of loan issuing and maintained till loan is closed.

General provisions

  • Term “Policy Holder” shall identify Customer or Customer representative.
  • Term “Insured” shall identify Customer, Borrower or Pledgor. 
  • Term “Beneficiary” shall identify represent Luminor Bank AS Lithuanian branch, branch code 304870069.
  • Insured object must be identified by Address according to Property Register (otherwise object will not be identified) 
  • Maximum deductible 500 EUR (fire risk for wooden objects max 10%). 
  • If loan agreement identifies more than one object to serve as a collateral to loan agreement, objects must be clearly identified in insurance contract. 
  • Only legally valid insurance contracts are accepted. In case Luminor receives information that Policy is not paid in agreed payment date and is to be terminated, Luminor holds the right to issue mandatory insurance or collect additional fee (according to agreement). 

Objects

Real estate objects that serve collateral role as agreed in loan agreement, must be clearly identified in the insurance contract. Following requirements are applicable to objects listed below. 

  1. Private houses, Apartments; 
  2. Other buildings – storage rooms, terraces, shed, cattle-shed, saunas, cottages, garages (standalone building, underground) etc.; 
  3. Private houses in construction phase; 
  4. Private houses, Apartments in renovation.

These requirements are not applicable to property as land – no insurance is required for land. 

Minimum risk cover

Object Apartments, private houses (1)
Other buildings (2)
Private houses, apartments in renovation (without building permit) (4)
 		 Private houses1 under construction (with building permit) (3) Land
Min cover required Named minimal perils:
Fire related risks;
Natural disasters related risks;
Water damage (leakage, engineering system accidents) related risks;
3rd party damage (e.g. theft, vandalism, robbery).
 		 Named minimal perils:
Fire related risks;
Natural disasters related risks;
3rd party damage (e.g. theft, vandalism, robbery).
 		 No insurance required

1“House under construction” when the building permit is required from the law.

Sum insured

Recovery/Renewal/Replacement value – all insured objects must be insured with full recovery value (defined in terms and conditions of each insurer)1

Under-insurance is not allowed (defined in terms and conditions of each insurer). It is obligation of insured and insurer to avoid underinsurance.

Required minimal Recovery/Renewal/Replacement value for apartments and private houses2

  Required replacement value 
Estonia From 1200 EUR/m2 (if construction material is wood only – from 1300 EUR/m2)
Latvia From 1200 EUR/m2 (if construction material is wood only – from 1300 EUR/m2)
Lithuania From 1200 EUR/m2 (if construction material is wood only – from 1300 EUR/m2)

1Replacement value in projects under construction is total sum of the project.
2Not applicable to “Other buildings”

Timing

Insurance agreement on customer’s existing assets must enter into force before disbursement of first part of the loan
Insurance agreement on assets to be acquired must enter into force before the act of transfer for the Asset is signed, and however not later than the risk of accidental damage, destroyal or loss transfers to the Borrower.

If not agreed differently in particular Loan agreement: 

  • For existing loan customers new policy must be provided 14 days prior existing one has expired.
  • For new loan customers policy must be provided immediately after pledge is registered. For objects under construction, insurance policy must be provided after object under construction is registered.

Corporate real estate insurance requirements

Objective

Insurance requirements set minimum rules to be met when insuring insurable collateral listed in Credit Manual. Insurance requirements minimise risks caused by sudden, unexpected and unforeseen events (insurable risks) to the collateral.

Insurance requirements ought to be met in process of loan issuing and maintained till loan is closed.

General provisions

  • Term “Policy Holder” shall identify Customer or Customer representative.
  • Term “Insured” shall identify Customer, Borrower or Pledgor. 
  • Term “Beneficiary” shall identify represent Luminor Bank AS Lithuanian branch, branch code 304870069.
  • Insured object is identified by Address spelled exactly according to records in each country’s real state.
  • Deductible amount per insurance object is (not applicable to Vehicles and machinery1) 1000 EUR or less. Maximum deductible amount for fire risk for wooden houses - 10% from compensation. 
  • If loan agreement identifies more than one object to serve as a collateral to loan agreement, objects must be identified in insurance contract.  
  • Only legally valid insurance contracts are accepted. In case Luminor receives information that Policy is not paid in agreed payment date and is to be terminated, Luminor holds the right to issue mandatory insurance or collect additional fee (according to agreement). 

Minimum risk cover

If not agreed differently in particular Loan agreement,

Insurable objects

Required risks

Sum Insured

Real estate objects
Inventory
Goods at stock
Unfinished goods
Industrial (production)
machinery and equipment

Fire related risks
Natural disasters
Water damage (e.g. Leakage, engineering system accidents)
3rd party damage (e.g. theft, vandalism, robbery)

All insured objects must be insured with full recovery/replacement value. 

For goods, inventory, equipment and machinery replacement value is market value.

For objects under reconstruction and Construction sites recovery value is amount of estimated value of the project (including recovery value for existing property).

For livestock replacement value is market value.

 

 

 

 

 

Objects under reconstruction, during renovation

(Without building permit)

Fire related risks
Natural disasters
Water damage (e.g. Leakage, engineering system accidents)
3rd party damage (e.g. theft, vandalism, robbery)

+ +

      Reconstruction related clause, where insurance company confirms that minimal named perils stated in insurance contract are valid during construction/reconstruction works. 

Construction sites

(with building permit)

Construction all risk cover:

any sudden and direct physical damage of previously insured contract works or property or direct damage to property caused by any cause because of a sudden and unforeseen effect of an external physical force, including the following:
Fire related risks
Natural disasters
Water damage (e.g. Leakage, engineering system accidents)
3rd party damage (e.g. theft, vandalism, robbery)
falling of or hitting by objects, construction machinery, vehicles, cargo;
collapse of structures or building;
accidental acts of employees of the construction company.

Livestock

Fire related risks
Biological risks (Accidents, Illnesses)
Natural disasters
3rd party damage (e.g. theft, vandalism, robbery)

Land vehicles

KASKO3

Industrial vehicles, moveable machinery

All risks according to Construction Plant’s and Machinery all risk insurance.3

LAND / debtors

No requirements for risk insurance

Non-standard objects (as ships, ferries, yachts, airplanes, helicopters, guarantees, forests, crops)

Non-standard objects – policy project must be agreed during decision making process with decision making body and identified expert to support pay-out.

3More detailed requirements in Insurance requirements (Vehicles and machinery)

Timing

Insurance agreement on customer’s existing assets must enter into force before disbursement of first part of the loan

Insurance agreement on assets to be acquired must enter into force before the act of transfer for the Asset is signed, and however not later than the risk of accidental damage, destroyal or loss transfers to the Leassee/Borrower.

If not agreed differently in particular Loan agreement: 

  • For existing loan customers new policy must be provided 14 days prior existing one has expired.
  • For new loan customers policy must be provided immediately after pledge is registered. For objects under construction, insurance policy must be provided after object under construction is registered.