Homeowner's Insurance: What Do I Need To Do? [insurance provider] [renters insurance]
Since I already approved and cleared to close . what should I have to take care of as far as homeowners insurance? Or is that done by the lender.
I know my Loan Officer requested information on my current insurance, State Farm is, I have renters insurance through them.
Best Answer: You are not required to have insurance on any property. The reason everybody thinks you are required is no bank will ever lend on a property unless you have insurance.
However, you should always have insurance on any property. This is especially true on rental properties. Your scenarios of a fire, death etc can reasonably happen. Whether it is your fault or not you will have the cost to defend yourself so the insurance is worth the cost for defense. You will also want to rebuild which you will need the insurance monies for.
I own rental property and i had a tenant slip and fall on my property. It was total BS but everyone has their right to sue. The tenant sued for a living and had four other similar cases pending. Three years later and 30K in legal bills the case was settled against my wishes. The insurance company paid the tenant 10K to go away. I still had the headache of dealing with the lawsuit and had to pay my deductable of $2,500. I figure it cost me $10,000 between my time and deductable. Without insurance it would have been $40K minimum and probably more.
Reply:I would think that if you go with a company that you already have renters or car insurance with, they wouldn't need to pull your credit, assuming that you have a good pay history with them. I have direct payments with State Farm, so hopefully credit shouldn't be an issue.
Reply: My husband and I are in almost the exact same position. We need to decide on who to go with for our Homeowner's Insurance, but we have a couple concerns.
1) We don't want them to run our credit if it will increase the number of inquiries, thus lowering our score. Is this a possibility? So far, we've had our credit run only twice since starting the home buying process, both times by the mortgage broker. (We should be closing escrow on May 19th.)
2) Can you recommend some reliable and inexpensive companies to use for our Homeowner's Insurance? We have renter's insurance with State Farm now and I know that they offer a discount if we use them for our car insurance and Homeowner's Insurance.
Any advice in this area is much appreciated!
Thanks!
We went with Allstate (reliable) having our auto insurance with them which led to a nice discount too. We weren't too worried if they pull credit (not sure if they even did).
Reply:My husband and I are in almost the exact same position. We need to decide on who to go with for our Homeowner's Insurance, but we have a couple concerns.
1) We don't want them to run our credit if it will increase the number of inquiries, thus lowering our score. Is this a possibility? So far, we've had our credit run only twice since starting the home buying process, both times by the mortgage broker. (We should be closing escrow on May 19th.)
2) Can you recommend some reliable and inexpensive companies to use for our Homeowner's Insurance? We have renter's insurance with State Farm now and I know that they offer a discount if we use them for our car insurance and Homeowner's Insurance.
Any advice in this area is much appreciated!
Thanks!
Reply:Thanks for the advice! I'm suprised my lender hasn't informed me of what they need by closing in regards to insurance.
Reply:One detail you might want to check is whether your lender requires a binder or an actual policy at the closing. A binder is a simple document that the company sends out promising to issue ("bind") coverage, with the actual policy to follow later. The policy is the whole thing- all the fine print. For one house I bought, the lender specifically said they wanted the policy. I told this to the agent about 10 times and 2 days before the closing they delivered- a binder. I got the policy issued in time, but it's just one of those details you have to look out for.
Another detail- make sure coverage is at least the amount the lender requires (generally the amount of the mortgage) and that the lender is listed on the Loss Payee clause. Check with the lender to see exactly how their company name should be worded in the Loss Payee Clause (typically something like, "XYZ Loan Company, its Successors and Sssigns") and give that info to your insurance agent.
Reply:
State Farm pulls a consumer report and it may drive your rates up depending on scores.
the insurance rates or the mortgage rates?
Insurance rates. It's very easy, just call and the State Farm you're buying….they'll walk you through the rest.
Reply: State Farm pulls a consumer report and it may drive your rates up depending on scores.
the insurance rates or the mortgage rates?
Reply: Since I'm already approved and cleared to close…..what do I need to take care of as far as Homeowners insurance? Or is that done through the lender.
I know my loan officer requested information on my current insurance provider which is State Farm, I have renters insurance through them.
You can't be cleared to close with out homeowners insurance…….call state farm for a quote and then check with a broker. State Farm pulls a consumer report and it may drive your rates up depending on scores.
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