When does the lender require you to purchase the homeowners insurance policy?

Homeowners insurance isn’t a state requirement, it’s usually an insurance coverage required by your mortgage lender. The lender wants to make sure the home is covered in case of an accident or disaster. In the event of a serious issue the mortgage company wants to make sure the home can be fully rebuilt or repaired if needed.

Very often during all of the excitement of purchasing a new, many of us forget about home insurance. Although, most if not all mortgage lenders require that you have homeowners insurance on the home before closing. 

When should you have home insurance

Typically, you will need to have homeowners insurance in place before closing on your home. When you get insurance before moving into your new home you will keep the home safe from disaster. You will want to do all of your own personal research. Ask questions and take a thorough inventory of your personal belongings. 

The best way to shop for a new home insurance policy would be to speak to a professional agent. The home insurance agents at Eugene C Yates Insurance Agency are absolute experts when it comes to homeowners insurance. They can take a look at your situation and the value of your home and help you to make the right decision on your new home insurance policy. Give us a call today 916 313 6100.

Keep in mind the majority or mortgage companies will not accept the terms of your new loan until you have home insurance. Some lenders may even require that you purchase additional coverage in addition to your standard homeowners insurance policy. 

Once you’ve purchased a home insurance policy that meets the mortgage companies requirements, you can move forward and buy the new policy. This is something you should have completed before you go to sign the official paperwork closing on the home loan. 

The home insurance company will give you a pre-approval and then will wait on the title company to send a request for proof of insurance. This usually happens closer to the closing date. From there the homeowners insurance company will send conformation of the home insurance coverage before the actual closing date. 

Protect your home and the mortgage company

Buying home insurance protects you from disaster and can save your a tremendous amount of future costs if utilized correctly. Home insurance can also protect you from an unexpected pipe bursting or faulty plumbing. Things of this nature hold a serious advantage for the homeowner. Instead of paying out of pocket for repairs that can end up being extremely expensive are paid for through the policy. 

Home insurance gives you peace of mind in knowing you’re taken care if the worst were to happen. It also insures your lender that their investment will be repaired and back to resale value if a disaster were to happen. 

Some homeowners choose to compound the taxes and insurance into the mortgage payment through escrow. This is usually set up by your lender and can end up being very convenient. Instead off talking multiple payments you would pay only one payment for taxes, insurance, principal and interest.

Home insurance is a smart  & necessary investment

Our homes are one of the biggest purchases we will make in our lifetime, so making sure it’s correctly protected should be a top priority. Most basic homeowners insurance policies include liability, protection for the structure of the home and your personal belongings. All of which can be very costly to repair or replace. 

The mortgage lenders required amount of home insurance coverage for the new home isn’t always clear. Each state has different rules and regulations and each homeowners insurance company will come with their own guidelines as well. At Eugene C Yates Insurance Agency we make this process easy for you. Our agents have access to the best home insurance companies in the industry, so they can do all the shopping for you. Comparing rates and policy limits to see what works best for your new home. Call us today, we would love to hear from you 916 313 6100.

HOA & Homeowners Insurance

Please don’t confuse the HOA dues you pay for home insurance. Home owners association fees pay for the upkeep and maintenance of your gated community or condominium. There is always a chance the HOA dues you pay have a portion set aside for insurance within the community but this doesn’t cover you the same way homeowners insurance will. 

The HOA will not cover the structure of the home in most cases. Also, there is a chance it will not cover your personal belongings as well. If you want to be covered personally you need a good homeowners insurance policy. 

Earthquake and flood insurance

A standard homeowners insurance policy will not cover you in case of a flood or earthquake. If you live in an area where either of these events are common, you will have to look into an earthquake policy or flood insurance policy.

A burst pipe or unexpected plumbing disaster may be covered in a standard home insurance policy. Although, flooding caused by a storm or hurricane more than likely will need to be covered through a flood insurance policy.

Wrapping up; There are a list things you should look for when purchasing home insurance and one of the best ways to shop effectively is to speak with a professional home insurance agent. The agents at Eugene C Yates are nice people and they have great rates! Give them a call today for a better home insurance policy 916 313 6100.