What Homeowners Insurance Is Required By Mortgage Companies?
Have you recently purchased a home, or are considering purchasing a home, and want to know what homeowners insurance is required by mortgage companies? Here's the lowdown ...
Homeowners Insurance Required by Mortgage Companies
Homeowners insurance is required by mortgage companies to protect the property they are holding a mortgage on. Most mortgage lenders require you to purchase a homeowners insurance policy for the amount of the mortgage.
However, because your home is a huge investment, you'll want to make sure that your homeowners insurance will not just protect your lender's investment, it will protect YOUR investment too. In order to adequately protect yourself from financial loss your homeowners insurance should cover the following:
Home structure - You should have enough homeowners insurance to be able to rebuild your home if it's destroyed by fire or other causes. To find out how much it would cost to rebuild your home, ask a local builder or a realtor for the square-foot building costs in your area, then multiply that figure by your home's square footage to get the amount of home coverage you need.
Floods and earthquakes are not covered by standard policies, so if you live in a flood or earthquake zone you'll need to purchase additional insurance for these disasters.
Personal possessions - Most homeowners policies insure your personal possessions for 50% to 70% of the amount of insurance you have on your home. To determine if this is enough coverage, take an inventory of all your possessions - furniture, appliances, electronics, clothing, jewelry, collections, etc. The total value of your possessions is the amount of coverage you need. If you need more coverage, ask your agent to increase it.
Personal liability - Liability coverage protects you against lawsuits when someone hurts himself or damages his property and you or your family is at fault. It also pays for your legal fees. Most policies provide $100,000 worth of liability insurance, but if you have a lot of assets you want to protect from a lawsuits you can purchase more.
Additional living expenses - This coverage pays for your living expenses when you have to move out of your home because of a fire or natural disaster. It pays your hotel and restaurant bills while your home is being repaired or rebuilt. Most policies provide coverage equal to 20% of your home coverage. You can increase this coverage if you feel you need to.
Getting Cheap Homeowners Insurance
The best way to get cheap insurance from a reliable company is to visit an insurance comparison website where you can compare rates from a number of companies. Some of these sites even have an insurance expert on call so you can get answers to any questions you may have. (See link below.) By: Brian Stevens Article Source: http://www.ArticleDashboard.com Visit www.LowerRateQuotes.com/homeowners-insurance.html or click on the following link to get homeowners insurance quotes from top-rated companies and see how much you can save. You can get more insurance tips in their Articles section.
The author, Brian Stevens, is a former insurance agent and financial consultant who has written a number of articles on what homeowners insurance is required by mortgage companies.
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