subject: Avoid Delays In Escrow Closing By Obtaining The Right Home Insurance In MI [print this page] Avoid Delays In Escrow Closing By Obtaining The Right Home Insurance In MI
If you are in the process of buying a home in Michigan, you will be required to submit proof of homeowners insurance before you are allowed to close escrow. Many first-time homebuyers overlook the importance of quoting home insurance before they approach the closing date. If you fail to quote and bind adequate homeowners insurance MI before the closing date of your loan you can experience frustrating delays. Avoid binding coverage in a hurry and know what you should look for to satisfy your mortgage lender. While sufficient coverage is important for you interests, the mortgage company is only concerned about their investment. If you fail to meet the requirements, you may end up paying more premiums for less coverage.
Dwelling Coverage
Mortgage companies are primarily concerned with the amount of dwelling coverage you bind. Dwelling coverage will pay to repair or rebuild the property if it is damaged because of a covered loss. The dwelling coverage amount you choose will differ from the purchase price of your home. Land is included in the purchase price of all homes. Because land does not have to be replaced you will only need to cover the dwelling itself. Consider the quality of construction and the square footage of your home to come up with an adequate dwelling coverage amount. Some mortgage lenders will require you choose a policy offering extended replacement cost to cover inflation.
Policy Deductible
When you are binding homeowners insurance MI the insurance company will give the option to choose a high deductible to conserve your premiums. Policy deductibles are how much you are responsible to pay if there is a loss to your home or if you file a personal property claim. Deductibles do not apply for Medical Payments or Liability coverage options. Some mortgage companies will require that you choose a reasonable deductible. It is always recommended to choose a deductible limit you can afford if you experience a loss. Most lenders require a deductible of $2000 or lower. If you choose to carry a $10,000, you must consult your insurer before you bind coverage to ensure it is acceptable.
Loss Payee Clause
On your policy, you will be required to list your mortgage lender as the loss payee or the additional insured. The lender will provide you with a loss payee clause showing exactly how the clause should read on your policy. If you fail to submit this information to your insurer the lender will reject your home insurance coverage. Be sure everything reads exactly as it is listed when you are submitting proof of coverage.
As long as you adhere to the requirements of your lender you should not experience delays in closing escrow. Obtain homeowners insurance MI in advance and bind adequate coverage that satisfies both you and your lender's interests. With a little time and effort you will be ready to move in just as scheduled.
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