Hmmmm sounds a bit hazy!! Surely a mortgage lender won't lend on a non-insured building. With our HSBC mortgage it's the only stipulation of the mortgage. Be surprised if it's not similar over there. Car Insurance is cheaper hope building insurance is too not thats its dear in the UK.
I always find it strange that my 300 quid car costs 600 to insure but my contents and whole building is less.