Gen Insurance
GenInsurance is our insurance broking service and an integral and necessary part of GenConsolidated’ business.
All land lease development home loans generated by GenMoney have two separate but related mandatory insurance policies attached; a general house insurance that covers the replacement value of the house in the event of fire etc. and a loan insurance policy that covers the borrowers loan amount.
Gen Insurance
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It’s important to note that GenInsurance’ loan insurance product is a non-recourse policy. In the event of a borrower’s loan default this policy covers the shortfall of any forced sale. There is no further payment exposure to the borrower, the policy and its premiums are entirely for the protection of the borrower. In comparison all current traditional Loan Mortgage Insurance (LMI) products are full recourse and are entirely designed to benefit the bank not the borrower. Under the traditional LMI model the borrower is still liable for the insurance premium payment but is not the beneficiary of the policy. In the event of a borrower’s loan default the LMI policy covers any shortfall in a forced sale which is paid to the bank or lender however the insurer is then able to pursue the borrower for all costs the insurer has been liable to pay to the bank under the LMI policy. GenInsurance does not support this form of loan insurance and none of our customers are subjected to these onerous terms and conditions.
In addition to the General Home and Loan Insurance products GenInsurance will, over time, other a suite of other consumer insurance products including, home contents, car, pet, life, and funeral.
The underlying importance of the mandatory insurance loan products is to protect GenMoney’ loan book. Effective insurance cover of GenMoney’ loan book has a direct impact on wholesale cost of funds and the ultimate cost of our consumer loans. It enables GenMoney to grow its loan book but most importantly the securitisation of its loan book in money markets nationally and internationally.