Homeowners insurance costs differ according to home size and location.
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Paying for homeowners insurance makes some people cringe. Shelling out money month after month for an intangible product can feel like pouring water into the sand. Insured owners living in prime locations such as the Berkeley Hills pay so that they can rebuild in case disaster strikes. Homeowners insurance could be the best thing you’ll buy–and hope you’ll never have to use.
Lenders and Insurance
Lenders require that homeowners obtain adequate insurance before funding a loan. Because banks and other lending institutions typically put up 80 per cent of a home’s value in cash, they insist that those receiving the money insure the investment. Insurance experts inspect properties for general upkeep before issuing policies and also help determine the level of coverage needed.
Types of Insurance
Basic homeowners policies cover damage to the house caused by fire, vandalism, hurricane, lightning, or other specifically covered events. Homeowners policies also cover loss or damage of personal property due to theft or other covered events. Expensive collections of jewellery or furs might need additional rider policy coverage. Losing possessions can be a shock if you never considered that possibility when opting against homeowners insurance. Policies also cover liability up to certain limits, protecting the insured in case someone injures himself on the property. They also pay for costs if someone sues the homeowner. Some people increase the amount of liability insurance they have with umbrella or extension coverage.
Basic homeowners insurance does not cover damage caused by earthquake and flood. Policies generally deny coverage of damage resulting from chronic and extreme neglect and faulty maintenance. There are limitations on mold-related situations and caveats for specific dog breeds kept on the property.
Alternative Insurance Options
California’s FAIR Plan coverage offers high-risk pool insurance for homeowners living in high-fire areas such as the Southern California foothills. Policies under FAIR, which stands for Fair Access to Insurance Requirements, are expensive and limited in scope. Wrap-around policies allow those with FAIR Plan coverage to supplement the policy with additional privately provided coverage. The state government in California also regulates earthquake policy availability for those who already have homeowners coverage. High deductibles and policy premiums dissuade some owners from purchasing earthquake coverage, betting that their home will never be involved in a significant quake.
Some people drop coverage if they are not required to have it. In the event of damage, an uninsured homeowner might lose the building and a place to live. A home is the largest asset most people have, so losing yours could be ruinous. Even if fire or wind damage never occurs, a slip by an uninsured worker on a slippery tile staircase could cost a homeowner thousands for medical care and lost wages.
Let me help make your home buying or sale a success. If you’re ready to begin the buying or selling process, give me a call today!
West USA Realty (Arizona)
Burke Real Estate Consultants (California)
480.797.4884 / 619.250.6214
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I am licensed in California and Arizona and we have a great team to serve you with members around the world.
California Bureau of Real Estate Lic. # 01222569
Arizona Department of Real Estate Lic. # BR550696000
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