A lender will require a home owner’s insurance policy when you apply for a home mortgage loan. A lender’s interest in this policy is to protect the lender’s collateral for the debt. While you are the owner of the property, the lender has invested a large amount of money in your home’s well being. If something happens to your home; the lender’s primary collateral is in jeopardy.
However, the lender is not the only party to the transaction that has a large invested interest in your home. So do you. From day one you will have invested thousands in the down payment, closing costs, and day by day interest and taxes. You also are placing the majority of the personal items you own here. You have a vested interest in the home that is very important and so it is in your best interest to have insurance. Be sure that the insurance you select is adequate to cover what is important to you in addition to what is important to the lender.
When you consider coverage keep in mind the following potential policy items:
Fire and explosions
Smoke
Flood and natural disaster
Ice, and snow
Wind and hail
Theft or vandalism
Frozen or broken plumbing
Aircraft and other vehicles
Injury liability
