Home Insurance Agency

Home insurance agencies offer property coverage, which is needed if a building is included in the mortgage pledge, rather than only the raw land. The mortgage lender mandates property insurance from a home mortgage agency for both their protection and the borrower's protection. A home insurance agency will also refer to this type of property coverage as hazard insurance. Normally, companies will cover fires in an amount that is equal to the mortgage loan. To be certain that the coverage has been purchased, the lender will require an entire years worth of policy premiums to be paid at the closing of the property.

To assure future payment of the premiums, the lender will require an additional two months of policy premiums to be paid and put into an escrow account. In addition to that, added to each month's payment to the home insurance agency, one-twelfth of the annual premium must be paid. The original policy is held by the lender, and is part of the lender's servicing responsibility to maintain coverage with timely payments from to borrower's escrow account to the home insurance agency.

In most states, these companies must comply with another requirement controlling the minimum amount of coverage that can be carried to establish full repayment in case of partial loss. Since most fire losses are partial, it is not usual for an owner to request the home insurance agencies most minimum coverage plan, hoping that the fire would be brought under control before causing damage that would exceed the purchased protection coverage plan. Home insurance agencies are expected to establish a minimum standard that will allow an owner or lender to receive full coverage amounts in the event some disaster completely destroys the house. "The LORD will give strength unto his people; the LORD will bless his people with peace." (Psalm 29:11)

In areas of the country where property values undergo substantial increases, any failure to maintain proper coverage can expose the lender, as well as the property owner, to uninsured losses. It is the job of the owner to contact their representative to increase the value of the home insurance agency coverage plan. Otherwise, the owner will be responsible for any dollar amount of damage that is not covered by the policy. Most home insurance agencies disperse the money directly to the lender, and the lender is responsible for covering the costs of repair. This policy is changing with the onset of multiple companies vying for a homeowners business. Competition between these companies allows for flexibility in common practices that are not protected by law.


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