Home insurance or homeownerâ€™s insurance is
generally required by mortgage lenders in the United States. In
addition, mortgagors are commonly required to provide proof of
insurance to the mortgage holder at least once a year. In most
cases, though not in all, the mortgage holder escrows (adds to the
payment and collects monthly) the insurance and ensures that it is
paid on behalf of the mortgagor in a timely manner so as to prevent
a lapse in coverage. Homeownerâ€™s insurance generally insures the
property, contents, and any outbuildings or structures (garages,
fences, sheds, etc.) from fire, wind, and other catastrophic
destruction. Traditional homeownerâ€™s insurance does not provide
protection against damage from flooding or from any event which is
not sudden, unusual, or unexpected (mold, termites, earthquakes,
etc.). Depending on the region of the country a consumer may be able
to purchase insurance against some of these normally uninsured
losses. The two best examples are flood insurance and earthquake
insurance, which are specialty lines clearly only appropriate for
houses at high risk for these occurrences. While lenders rarely
require earthquake insurance, it is commonplace for lenders to
require flood insurance in the non-preferred portions of flood
plains. Subsidized flood insurance is available for purchase through
the Federal Emergency Management Agency for $317 per year to insure
$250,000 in buildings and $200,000 in personal property.
Additionally, most private insurers sell excess flood insurance to
insure higher limits of liability.
Make the right decisions when shopping for homeowner's
insurance and other financial services. Educate yourself!
Please note that the Debt Consolidation Loan Directory
has a growing library of informative resources for consumers shopping for many
types of financial products, such as home insurance and jumbo loan financing.
The best way to make more better decisions regarding the management of your
personal financial matters is to become educated. Please feel free to visit our
consumer education library