Many of you out there might keep on wondering whether at all you need homeowner’s insurance to have a home of yours or not. The truth is you do not necessarily require a homeowner’s insurance policy to have a home of your own. If you are building the home with your own money without the help of lenders (i.e. without having to borrow money from lenders) then you can jolly well choose not to invest in a home insurance cover.
However, if you are approaching the entire home buying process through a mortgage then your mortgage lenders will insist on home insurance cover since their investment is involved here. Now, this type of policy generally consists of two parts- a) the building insurance b) the insurance on the contents inside it. If you are looking at buying a homeowner’s insurance policy that you can do that from the same insurer rather than buying two different parts from two different insurers- as the former option would be much cheaper than the latter one.
Mortgage and Home Insurance
Please remember that if you are taking out a mortgage, you would be required to provide substantial proof of the fact that your home is insured. The final mortgage papers cannot go through without the insurance papers. A copy of the cover has to be placed in your file. The insurance papers should also contain the name of the lender. In case, your house is destroyed by the dangers listed on the insurance (or everything that is covered by insurance), the payment check from the insurance company will be made out jointly for the lender and you. You will not be able to encash the check without the lender’s sign. Even the lender cannot do the same without your signature because the whole payment contains what you owe to the lender as well.
You can even secure a policy if you are just a tenant. In this case, you can just ensure the contents of the home. In the event of a mishap, you will be paid accordingly. It is not mandatory on your part to get the building insurance through the mortgage provider, unless and until it’s a specific requirement of the mortgage contract.
How much coverage would you need?
In a bid to determine the total coverage you would be required to calculate how much money you would need to replace your abode in its present condition. It is very important to understand that you cannot calculate your insurance needs based on the earlier price of the home. Rather, you should consider the present cost of the home.
Pet Insurance
A standalone pet insurance policy needs to be obtained if you are willing to insure your home items for damages caused by pets. General home insurance covers might not include these costs. Make sure that you are considering these few important factors before availing of a cover. Consult a few home insurance providers online to settle for the best choice.
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