Insurance requirement

Where buildings permanently connected with the land are taken into account as increasing the mortgage lending value, it must be ensured, for the entire duration of the loan, that the Pfandbrief bank receives compensation from insurance in the event of damage to or destruction of the building, provided it is not restored. The insurance must cover at least the damage risks material according to the type and location of the property. The amount of the insurance must cover at least the following: 1. the costs expected to be incurred for restoring the buildings named in the first sentence, 2. the damage to the buildings named in the first sentence that would, with high probability, not be exceeded upon the occurrence of material risks, or 3. the outstanding loan claim in each case, limited to the current-value damage that the Pfandbrief bank would have received from a value-adequate building insurance in the event of a claim. Where the insurance is concluded for a large number of properties or a large number of outstanding loan claims, an agreement limiting the insurance benefit to the damage that would, with high probability, not be exceeded within a period of one year (maximum annual compensation) is permitted. For individual building insurance, a maximum annual compensation for individual types of risk, with the exception of fire risk, is permitted. The Pfandbrief bank may conclude the insurance for its own account only where an obligation of the borrower to conclude corresponding insurance under the third sentence, no. 1 or no. 2 exists.