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How How Much Insurance Do I Need After Being Approved For My Home Mortgage?

By Kevin Landis

What you need to know when figuring how much insurance you need on your new home mortgage? Tips on getting the right amount of coverage and who you need to ask for further assistance.

When you get approved for a home mortgage there are responsibilities that you must assume and maintain. One of those responsibilities is getting the proper amount of home insurance to protect your new investment. A majority of lending companies will require that you maintain home insurance; this protects them in the event something happens to the home and yourself as well. How do you know what is the right amount of coverage to get and how much do you really need to satisfy those requirements.

How Much Insurance Do I Need For My New Home Mortgage?

Buying home insurance can seem like an overwhelming task but there are basic amounts of coverage that every homeowner should have in case anything happens to the home. This basic coverage is pretty standard to all home insurance policies and what lending companies require for coverage when you take out a home mortgage.

This coverage includes insuring the home for 100% of its rebuild value. This is not the market value or what you could sell your home for, which may be more or less, but how much it will cost to rebuild it in case of fire or other damage at the current cost of construction materials. Home mortgage lenders suggest 100% coverage. If you were to only insure say 90% of your home, then that is the amount of coverage you will receive and you will be responsible for paying the remaining 10% of the costs.

Insuring The Contents Of Your Home

There is also coverage for the contents of your home which includes furniture, any precious artwork, jewelry, and electronic items. This can be insured for half the value of your policy which is standard but could be more or less.

Other Types Of Coverage

Other types of coverage exist to protect yourself and your home. You should speak with a professional insurance agent who can advise you on the best types of insurance that you need for your specific needs.

Related posts:

1. What Type Of Insurance Do I Need When Getting A Home Mortgage?
2. What Is Mortgage Loan Insurance?
3. How Much Does Mortgage Loan Insurance Cost?
4. What Is Private Mortgage Insurance?
5. What Is Included in My Monthly Mortgage Payment?