Considering a NH Mortgage? Five Reasons Why You Need Homeowners Insurance Roger Odoardi Why A NH Mortgage Needs A NH Insurance Policy A homeowners insurance policy provides a level of protection for not only your home, but also your belongings—particularly in case of catastrophic events that cause damage or destroy your property. If you have a NH mortgage and are susceptible to New England weather, getting this level of protection should be on the top of your to-do list. Here are 5 reasons why you need homeowners insurance: 1. It’s required by your NH Mortgage You’re going to need to bring a homeowners insurance certificate to the closing of your NH mortgage showing that your mortgage company’s interest in the home is protected, or the closing won’t happen. Until your mortgage is paid off, there has to be a policy in place to protect the home. Some mortgage companies will even arrange to make the payments for you out of your monthly mortgage payments to ensure the home doesn’t go without coverage. Your mortgage company needs to ensure that your policy is covered to “replacement cost”. For a NH mortgage, that means that the “Coverage A. Dwelling” must be insured to at least 80% of the cost of replacement of the home, should the home be a total loss. As long as the homeowners policy meets this threshold, the insurance company is required to cover the cost of the replacement of the home in full, less the deductible. 2. You will have to pay for insurance one way or another If at any point your home insurance lapses, your NH mortgage company will have to place their own coverage on the home and charge you the premium. These policies are not particularly well regulated, and are considered “high risk” so they cost mortgage companies more, much more. These policies will cost you three to four times what you would have paid on your homeowner’s insurance premium, and it doesn’t even protect any of your possessions or your personal liability, so it’s best to have one. 3. It covers all of your possessions All homeowners insurance policies automatically build in protection for your “personal property” up to a percentage of your “Coverage A. Dwelling” value. Though there are limitations which you should discuss with your insurance agent, your homeowners policy will cover items you own, even when they’re outside your home. So, for example, if your laptop is stolen out of your car, and you’ve properly documented your ownership, your homeowners policy will cover it. 4. It covers your liability One of the greatest advantages of a homeowners policy is that it covers your liability in the event that you are found legally liable for damage or injury resulting from any number of things (depending on your policy), even if the event didn’t happen on your property. This covers dog bites, slip-and-falls, and many other unexpected events or accidents. 5. It covers you if you lose use of your home If you have a loss from a covered event, like a fire, that puts you out of your home while repairs are being made, your insurance policy will pay to put you up in a comparable place up to the limits described in your policy. We know that securing your NH mortgage and getting into a new home can be daunting all in of itself, but we want our customers to have all the information they need to succeed in the home buying process. Contact us today for any questions about insurance requirements, or anything else to help you move forward with homeownership—with confidence. Roger Odoardi Roger is an owner and licensed Loan Officer at Blue Water Mortgage. He graduated from the University of New Hampshire’s Whittemore School of Business and has been a leader in the mortgage industry for over 20 years. Roger has personally originated over 2500 residential loans and is considered to be in the top 1% of NH Loan Officers by leading national lender United Wholesale Mortgage.
