How Much Home Insurance Do I Need for a Mortgage?
While homeowners insurance isn’t a legal requirement, it is still considered an essential part of being a responsible homeowner. Your mortgage lender may also require home insurance because they want their investment to be properly protected.
How Much Home Insurance Do Mortgage Lenders Require?
The amount of home insurance a mortgage lender requires varies based on a few factors, including the following:
- The amount of your down payment
- The amount of the loan
- If the location of your home or its features call for additional coverage
Lenders will most likely require you to carry enough insurance to cover the amount of your loan. However, it is recommended that a home is insured for its full replacement costs to ensure that it can be replaced in an incident where it is destroyed.
At What Point in the Home-buying Process Should I Get Home Insurance?
A mortgage lender will most likely require proof of homeowners insurance before you can close on your home. When you sign a contract to buy a home, you should start shopping around for a homeowners insurance policy.
What Is Included in Home Insurance?
A typical homeowners insurance policy includes the following four types of coverage:
1. Dwelling coverage may help cover the physical structure of your home, plus any attached structures, such as an attached garage or deck.
2. Personal property coverage may help cover your personal belongings, such as furniture, clothing, electronics, tools and sporting equipment.
3. Liability insurance may help protect against injuring or causing property damage to a third party.
4. Additional living expenses coverage may help pay for you to live elsewhere if your home becomes uninhabitable due to an event covered in the policy.
Do I Still Need Home Insurance After My Mortgage Is Paid Off?
Once you pay off your mortgage, ending your home insurance policy may be tempting because you are no longer required to have it, but it is highly recommended to continue coverage. Your home is most likely your biggest investment, and insurance is the best way to protect it and yourself from the unexpected. As long as you own a home, you should have home insurance.
Home Insurance Quote in St. Charles, IL
If you’re interested in learning more about home insurance, contact RKM Insurance Services. Our primary focus is to find the insurance coverage that best suits your unique needs and gives you the best options.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.
Categories: Homeowners Insurance
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