What Homeowners Insurance is Required by Mortgage Companies?

that your homeowners insurance will not just protect your lender’s investment, it will protect YOUR investment too. In order to adequately protect yourself from financial loss your homeowners insurance should cover the following:

Home structure – You should have enough homeowners insurance to be able to rebuild your home if it’s destroyed by fire or other causes. To find out how much it would cost to rebuild your home, ask a local builder or a realtor for the square-foot building costs in your area, then multiply that figure by your home’s square footage to get the amount of home coverage you need.

Floods and earthquakes are not covered by standard policies, so if you live in a flood or earthquake zone you’ll need to purchase additional insurance for these disasters.

Personal possessions – Most homeowners policies insure your personal possessions for 50% to 70% of the amount of insurance you have on your home. To determine if this is enough coverage, take an inventory of all your possessions – furniture, appliances, electronics, clothing, jewelry, collections, etc. The total value of your possessions is the amount of coverage you need. If you need more coverage, ask your agent to increase it.

Personal liability – Liability coverage protects you against lawsuits when someone hurts himself or damages his property and you or your family is at fault. It also pays for your legal fees. Most policies provide