
Insurance Requirements
Insurance Requirements
- Accepted insurance companies
- Private residential property insurance requirements
- Corporate real estate insurance requirements
Accepted insurance companies
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
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
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.
- 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).
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.
- Private houses, Apartments;
- Other buildings – storage rooms, terraces, shed, cattle-shed, saunas, cottages, garages (standalone building, underground) etc.;
- Private houses in construction phase;
- Private houses, Apartments in renovation.
These requirements are not applicable to property as land – no insurance is required for land.
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.
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”
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
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.
- 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).
If not agreed differently in particular Loan agreement,
Insurable objects |
Required risks |
Sum Insured |
---|---|---|
Real estate objects |
Fire related risks |
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 + + 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: |
|
Livestock |
Fire related risks |
|
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)
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.