Homeowners Insurance

Homeowners insurance or home insurance is typically required for anyone who takes out a mortgage to buy a home. Prior to closing on a mortgage, you must be able to provide a proof of homeowners insurance. The insurance helps protect the home, the contents within and the homeowner from any catastrophic damage. Lenders require such insurance as to help protect the mortgage note and to make sure you will be financially capable of paying down the mortgage, if something should happen, so that the homeowner is protected. 

How Much Insurance Is Needed?

Unlike mortgage insurance, homeowners insurance is related to the value of your home and contents, not the amount of down payment you make on your home. You should look to insure your new home for 100% of the replacement cost.

What Is Typically Covered?

Though policies can vary, typically, homeowners insurance provides four types of coverage and will only extend each type of coverage up to certain limits.

These coverages include:

  • Dwelling coverage: covers the structure of your home if damaged by hazards, such as fire, wind or hail
  • Personal property coverage: covers your home contents and personal belongings
  • Liability coverage: covers you and your members from liability lawsuits
  • Additional living expenses coverage: ‘if your home is unlivable, this covers living expenses associated with temporarily residing out of your house.

Depending on the home’s geographic location, lenders might require additional insurance. For example, if the home is in a high-risk flood zone, your lender will likely require flood insurance.

Do I have to make insurance payments separately?

During the loan process, after obtaining home insurance, the lender will typically bundle the insurance costs along with the mortgage into a single monthly payment to cover both. This helps to ensure that you have enough money to pay both important expenses on time.

Keep in mind that homeowners insurance is not included in your mortgage and the policy remains separate from your mortgage loan agreement. When both are bundled, your homeowner insurance premium will go to your homeowners’ insurance company and your lender receives the mortgage payment.

Related Articles

2024 Conforming Loan Limits

FHFA Announces Conforming Loan Limits for 2024

Baseline Conforming Limit Will Increase to $766,550 FHFA Announces Conforming Loan Limits for 2024 | Federal Housing Finance Agency Washington, D.C. – The Federal Housing Finance ...
Read More →

Mortgage Soft Pull for Stress-Free Home Shopping

Welcome to George Mason Mortgage – Your Key to Stress-Free Home Buying! Are you ready to embark on your home-buying journey? We believe that knowledge ...
Read More →

Federal Home Loan Bank (FHLB) of Atlanta provides Grants for Community Partners and First-Time Homebuyers

Opening Doors for More Homebuyers George Mason Mortgage understands that saving money for a down payment and closing costs is one of the most challenging ...
Read More →
Out of This World Rent

Rent prices out of this world?

At George Mason Mortgage, we understand the challenges you may be facing in today’s housing market, and we are here to empower you with viable ...
Read More →
Maryland Smartbuy Program 3.0

Achieve Your Dream Home and Tackle Student Debt with Maryland SmartBuy Program 3.0

Are you a Maryland resident dreaming of homeownership but burdened by student debt? The Maryland SmartBuy Program 3.0 is here to help you turn that ...
Read More →
Gifts Grants and Affordable Seconds - Horizontal

Unlocking Opportunities with Gifts, Grants, and Affordable Seconds

GIFTS Take advantage of the generosity of your loved ones or community organizations! This allows you to receive financial assistance from eligible donors to use ...
Read More →
Scroll to Top