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Home owners insurance requirements for leases, rentals and mortgages

By Compuquotes Team on March 27th, 2008
Homeowners Insurance

Whether you are renting, leasing or you own your home, you want to ensure that you have home owners insurance to protect your property and possessions. There are quite a few things that could instantly take everything away from you, (a total loss) or even a partial loss where you lose some of your items, or part of the home itself. There are also injuries to consider for the people that live with you and those that are visiting the property - home owners insurance protects you from people who are injured on your property.

If you have purchased a home, there is a good chance that you have a mortage to help pay for the home. Essentially, the bank owns your home and you are paying them for it. In the mean time, both you and the bank have joint ownership of the property and most lenders require that you have homeowners insurance to protect from a total loss (some of which is actually their money). If you do not have homeowners insurance and you experience a situation that destroys the home completely, you will still owe money to the bank for the mortgage. A home owners insurance policy will protect you from this devastating financial blow if there is a peril that happens to your home.

Not only do lenders require that you have home owners insurance, but most leasing companies and landlords do as well, however in these cases it is called renters insurance. If something happens to the home you are living in, the landlord is not responsible for your contents. Likewise, you are not responsible for the structure of the building with your insurance either.

It's easy to underestimate the value of your peroperty, so if you aren't sure what your property is worth, hire an appraiser to get a firm number to base your homeowners insurance on. You have to consider what would happen if you didn't have anything left - you experienced a total loss. Could you replace everything on your own? Likely, no. Homeowners insurance covers everything you own in your home, right down to your underwear.

Investment in home owners insurance is a wise decision - it protects you endlessly. Of course, we all hope that home owners insurance is one of those purchases that you never have to use, but in the event of a loss, you will be happy that you spent the money to cover your personal property.

No one knows what tomorrow will bring - you cannot predict the future and perils can happen to anyone at any time. It can happen to you and it can happen at any time. It's best to talk to your mortgage lender, your landlord or leasing company and find out from them what home owners insurance requirements they have, then sit down with your insurance agent and discuss the minimum insurance you require and the insurance that you need to protect your belongings. Your insurance agent will be able to answer any questions you have about your home owners insurance and what you require for coverage. There's a lot to consider, so talk to a professional.

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