Why was Property Insurance Premium debited without my knowledge ?

POSTED BY arunj ON February 27, 2014 10:56 am COMMENTS (6)

I applied for a Home Loan (for 15 lakhs, 10 years, property value 38 lakhs) from SBI recently. After the appointment and documentation at bank, today I noticed that an amount of Rs. 9150 is deducted from my SBI Savings account and the transaction says towards “General Insurance”. My understanding is that this is insurance for natural calamities, fire etc.

When I called them they told me that it is mandatory. I made it clear that I wasn’t told of the amount beforehand and I didn’t like the way it was debited from my account without informing me of the amount first. However, things I want to know are

1. Whether this amount is a one time amount or I have to pay this amount every year?

2. If I pre-close the Home Loan in 5 years time will I get back any part of this Rs. 9150? If yes, what’s the procedure?

6 replies on this article “Why was Property Insurance Premium debited without my knowledge ?”

  1. arunj says:

    Thank you so much for clarifying!

    I am taking a loan for the first time in my life and I am having a hard time validating everything these people are saying. Somehow I feel that the only intent is to get the full amount from me ASAP, without any knowledge of when I will actually get possession.

  2. ashalanshu says:

    Dear Arun, yes is my answer.

    Thanks

    Ashal

  3. ashalanshu says:

    Dear Arun, bank ‘ll release 95% of loan amount. Balance 5%’ll be given at the time of possession.

    Thanks

    Ashal

    1. arunj says:

      Hi Ashal,

      That contradicts what the person who is handling my loan application at SBI says. He is saying that bank will release full 15L after I submit registration papers. He is also saying that I have to clear my 100% before bank releases the loan amount of 15L.

      But from what you have mentioned, my understanding is: By registration I have to clear 95% of the 23L of my share, not full 23L. Is that understanding correct?

      Thanks!

  4. arunj says:

    Hi,

    Thank you for your reply. I understand that I may apply for a refund for the prorata amount if I pre-close the loan.

    I have another question:
    As per my agreement I have to pay 95% by registration and rest 5% during handover.
    If I clear upto 95% of the property cost by registration (i.e. I clear 21.1 lakhs from my side, bank has to pay loan amount 15L) and submit the receipts to the bank, will the bank (SBI) release full 15L to builder? Builder has given demand letter of 15L to bank citing that 95% project is completed.

    Or do I need to clear full 23L of my amount by registration before bank releases its 15L?
    My concern is that in this case I will end up paying all the amount before handover.

    Thanks!

  5. ashalanshu says:

    Dear Arun, the amout is one time affair. you ‘ll not get 9150 Rs. after 5Y. You ‘ll get a prorata amount.

    Thanks

    Ashal

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