Obtaining Home Insurance In Orange County Before Escrow Closing
When you buy a home and you are financing the property
, your lender will require you to invest in home insurance Orange County prior to the close of escrow. One of the most overlooked steps in buying a home is the need to obtain quotes well in advance to compare coverage options and most importantly premiums. Give yourself an advantage during the home buying process by obtaining quotes with several reputable companies to ensure you are prepared for closing without delays. When you are obtaining quotes, know what lenders are concerned with to ensure your certificate of homeowners insurance is acceptable on your expected close date.Dwelling Coverage
The most important section of the home insurance contract to the lender is how much dwelling coverage you are carrying. Because the lender is offering you funds to purchase a property, they have a financial interest in the dwelling. The lender wants to stay protected in the event your property is damaged or deemed a total loss. While the dwelling coverage may not be the actual sales price of the dwelling, it must be sufficient and meet the minimum requirements the lender has stipulated in your financing contract. Refer to the minimum amount of Dwelling coverage the lender will accept before binding insurance.
The Insurance Company
When you are shopping for home insurance Orange County policies you may want to inquire which insurance companies the lender accepts. While some lenders will accept certificates of insurance from any insurance company, others want their borrowers to be protected by an A-rated company that is financially stable. The lender wants to be guaranteed quick payment in the event the property is a total loss. If the borrower does not choose an A rated and financially stable company it could complicate things.
Policy Deductible
If your home has a high dwelling limit or you have experienced prior home insurance losses, your premiums may be higher than the average policy. One way to lower premiums and still satisfy the requirements of the lender is to raise your policy deductible. Before you do this, be sure that the lender will accept a higher deductible such as 1 or 2 percent of the dwelling coverage. Some lenders will accept deductibles no higher than $10,000.
Loss Payee Clause
In every home insurance policy, there must be a lender's loss payee clause. This clause must read word for word as provided by the lender. If this is inaccurate or missing, your certificate of insurance will not be accepted.
Make sure your home buying process goes as seamless as possible by investing in insurance early. By inquiring on the required coverages and deductibles, you will be one step closer to receiving your keys and moving into your new dream home.
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