In short
- Assignment = the bank's right to the payout up to the debt.
- The bank must accept a non-bank policy that meets its requirements.
- Watch renewals — a lapse may raise your margin.
- Applies to both building and life insurance.
How it works in practice
- Get the bank's policy requirements (sum, scope, term).
- Compare offers from several insurers.
- Buy a policy with assignment to the bank.
- Send the bank the policy and assignment confirmation.
What to watch
The sum insured must match the rebuild value or the amount the bank requires. Some banks require flood cover.