Mortgage insurance and life cover in Italy

What a lender may ask for

The Banca d’Italia’s mortgage guide (updated February 2026) lists among the costs of a mortgage the premium for insurance covering damage to the property and, possibly, “risks linked to events in the customer’s life that could prevent repaying the loan”. Whether a particular lender requires such cover is set in its general information sheet and offer, not by a single rule, so read the documents rather than assuming.

Two terms to recognise in an offer:

• Property policy: covers the building against damage, such as fire.
• Life or protection policy (the guide’s words are insurance on the customer’s life): pays or covers instalments if something happens to the borrower.

Your right to choose the policy

Art. 28 of Decree-Law 1/2012, as shown on Normattiva on 19 October 2026, says that where lenders make the grant of a mortgage depend on signing an insurance contract, or where an insurance offer is connected or ancillary to the loan, they must accept the policy the customer presents or finds on the market, without varying the terms offered for the mortgage. If the policy is needed to obtain the loan or to obtain it on the terms offered, the customer’s policy must offer a level of guarantee equivalent to the one proposed by the lender. The Banca d’Italia guide puts it simply: the lender “is bound to accept” the policy you present or find independently, provided protection is equivalent.

The same article adds:

• Withdrawal. If you sign, at the time of the loan, a policy proposed by the lender or its agents, you can withdraw within sixty days, and the loan contract remains valid and effective. If the policy is necessary for the loan, you can substitute one you find yourself, with equivalent cover.
• Separate notice. Lenders, or alternatively insurers, must inform you of these rights in a separate communication from the contract papers.
• Standard content. The insurance supervisor, IVASS, may define standard content for the policies required to obtain a loan, to help judge equivalence.
• Commission disclosure. Banks and lenders must tell you the commission they receive and the amount paid by the insurer to the intermediary, in absolute amounts and as a percentage of the total (para. 3-bis).
• Tying. Para. 3 extends a provision of the consumer code (art. 21, para. 3-bis), which concerns tying a loan to a policy sold by the same bank, so that it also covers tying it to opening a current account with that bank. Payotte did not read the consumer code article itself, so ask your lender in writing what it requires and why.

Payotte did not read IVASS’s implementing rules. Legislative Decree 212/2025, in force since 10 January 2026, also reworded art. 28. Under its article 6, lenders and credit intermediaries must adapt by 20 November 2026 or, if later, within 90 days of the Banca d’Italia’s implementing rules; the same article keeps consumer credit contracts signed before that deadline under the earlier provisions. If your mortgage is signed around then, ask the lender in writing which rules it applies.

The Banca d’Italia adds a practical warning: the policy offered by the lender may cost more than others on the market, so compare.

How premiums show up in the cost figure

Art. 120-quinquies TUB says the total cost of credit, and so the TAEG, includes the costs of accessory services, including insurance premiums, if signing them is a condition for getting the credit or getting it on the offered terms. If cover is optional, its premium is outside the TAEG. This is why two offers with the same interest rate can show different TAEGs: see TAEG vs TAN. It also explains why substituting an equivalent policy at lower cost may reduce your real cost while the offer’s headline TAEG does not move.

Insurance and your tax return

The Agenzia delle Entrate’s guide on the mortgage-interest deduction for the 2026 return lists, among the items excluded from the deduction, the property insurance expense, because it is not necessary to the mortgage contract. The 19% deduction on interest up to €4,000 a year therefore does not extend to the premium. Payotte did not read the rules on deducting life-insurance premiums, so ask an accountant before counting one.

Which professional to consult

An insurance intermediary can compare policies on the market, and a mortgage broker can help you ask the lender which level of cover it treats as equivalent. A notary does not sell insurance but sees the loan deed.