Why Do Mortgage Lenders Often Require Homeowners Insurance?
If you buy a house in cash, you can choose whether you’d like to take out Florida homeowners’ insurance. However, most mortgage lenders won’t offer you money unless you have a policy in place. Today, we’ll have a closer look at why insurance is so important for both you and the lender and how you can find a Florida insurance policy that doesn’t break the bank.
Why Do Mortgage Lenders Often Require Florida Homeowners Insurance?
Mortgage lenders take on a lot of risk when you borrow money from them. If you fall behind on your repayments, the mortgage company might force a sale of the home and take back their money. However, they can’t do this if the home is no longer in good condition because it’s been damaged by a fire, storm, or similar disaster. That’s why lenders usually ask you to take out insurance.
A good homeowners’ policy protects both you and the mortgage company because the insurers will pay for any damage. Before you take out insurance, check how much coverage your mortgage lender requires. They’ll want to make sure that you can pay them back everything you owe them.
Which Florida Insurance Company Should I Use?
Getting homeowners’ insurance is a good idea, whether you’re taking out a mortgage or not. In Florida, it can be hard to find a good policy because prices are very high. However, you can still get a good deal if you go with the right company. Some popular options are Allstate, State Farm, Tower Hill, Geico, and Progressive. An insurance agent can compile quotes and help you decide which insurer is right for your situation.
Mortgage lenders almost always ask you to get homeowners’ insurance because this protects their investment. You can find good policies with the help of experienced insurance agents. Give us a call at DTRT Insurance and ask us for quotes.