subject: Satisfy The Requirements Of Your Lender With The Right Home Insurance Policy [print this page] Satisfy The Requirements Of Your Lender With The Right Home Insurance Policy
If you are in the process of purchasing a home in the state of Florida, it is important to educate yourself on your closing requirements with the bank. While you may have provided all of the supporting documents needed to have your mortgage approved, you will also need to provide proof of Florida homeowners insurance before you can close escrow. Failing to obtain home insurance quotes during the lending process can delay your loan closing and create a headache that could have been avoided. While some lenders will offer you the option to secure insurance with affiliated home insurance companies in the area, you must do your own research to ensure you are receiving the best rate and the most comprehensive coverage.
Buying a home is one of the largest investments you will make in your lifetime. To protect your financial future, you must invest in Florida homeowners insurance that will protect you against common exposures such as fire, theft, and vandalism. When you are comparing various home insurance quotes, you will need to take an in-depth look at the coverage offered on your quote and the requirements of the lender. Binding insurance that is not acceptable to the lender could cause time delays and additional time and effort that you may not be prepared to offer.
The two coverages mortgage lenders are concerned with are the Dwelling Coverage Limit and your Personal Liability Limit. While there are numerous additional coverages to consider, these are the two the lender will review when preparing to close your loan. While each lending institution will have a different guideline on the minimum dwelling coverage limit specified on the Florida Homeowners Insurance policy, you should always adequately protect your home even if the lender's required limits are low.
Dwelling coverage is designed to repair or rebuild your home up to the limits specified on the policy in the event of a covered loss. The dwelling coverage you choose will depend on several different factors. The square footage, quality of construction, and features of the home should all be considered when selecting the appropriate dwelling limit. While some homeowners choose to cover the dwelling for the purchase price of the home, this is a practice that should be avoided. Because land is not covered and dwelling coverages are designed to pay for the supplies and labor to rebuild, you must contact contractors in the area to understand the estimated cost to build your home from the ground up after a loss.
The mortgage company will require your insurance agent to provide them with a certificate of insurance explaining the dwelling limit, liability limit and the listed loss payee. Be sure the mortgagee clause is accurate and the limits chosen are acceptable and make your loan closing as streamlined as possible.
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