Most states do not have a law making it legally imperative for homeowners to get home insurance. Unlike other insurance, which is legally mandatory, home insurance is discretionary but a homeowner may have to choose a policy before buying a home. This is often a prerequisite for lenders or mortgage companies that would be offering you a home loan.
What Do I Need to Know about Home Coverage?
Most lenders or mortgage companies in the state and across the country necessitate home insurance for them. This is due to sanction the loan and eventually fund the purchase of a property. Some lenders are more lenient and would wait for a proof till the time the loan amount has to be credited. Some lenders are more stringent and would not approve the mortgage before proof of purchase has been provided.
Home insurance in Florida is similar to homeowners insurance in other states, according to https://floridainsurancequotes.net/home-insurance/florida-home-insurance-company-dropped-me/. It is a contract between a homeowner and an insurance company, wherein the former pays a premium and in exchange is provided with a chosen coverage to protect the insured against risks associated with homeownership. Home insurance typically covers the dwelling property and common liabilities.
What will I be protected against?
A homeowner will be protected against property damage, any medical expenses that may emanate due to partial or complete loss of property, living expenses that may be necessary for repairs or replacements and other perils. The perils usually covered by homeowners insurance policies are fire, windstorm, explosion, hail, lightning, smoke, theft, mischief, vandalism, aircraft and vehicles causing damage to property and others. Some perils such as volcanic eruption, accidental flooding, building collapse, falling objects and other accidental or incidental damage are not covered in basic policies.
There are many types of policies you can choose from. The most common policies are basic, broad, special, comprehensive, modified coverage, tenants or renters coverage, and condominium owners coverage. The cost of premium will be directly proportional to the coverage sought. The more extensive or comprehensive the coverage you choose, the more you shall pay for the policy. All mortgage companies or banks, financial institutions and lenders have the right to protect their investments.
They can ask homeowners to provide proof of having purchased a home insurance policy. Also if they signed up for it to get the home loan processed and disbursed. You cannot buy home insurance before finalizing a purchase. This is because the property will need to be factored in to determine the coverage. It will influence the premium according to https://floridainsurancequotes.net/home-insurance/top-rated-homeowners-insurance-companies-in-florida/. In a way, the insurance and the house must be purchased in tandem.