How Homeowner’s Insurance Affects Your Mortage

For many people, a house can be considered as the largest financial investment one could have. However, it could also be the most vulnerable as it is always subject to unforeseeable and uncontrollable situations such as natural disasters, vandalism, fire, and burglary. In order to soften the risk of losing your home’s value, a homeowner’s insurance policy is definitely a good way to go.

Homeowners who finance their home with a mortgage will likely purchase home insurance coverage in order to protect the property in case of emergency.

How Homeowner’s Insurance Affects Mortgage

Most lenders require homeowner’s insurance as a condition of mortgage. In majority of the cases, when you have a mortgage loan, the lender provides an option of including homeowner’s insurance with principal and interest loan payments. Usually, the lender will be holding the funds in an escrow account which accumulates the money during specific period of time. In return, the mortgage company pays the homeowner’s insurance once the account has reached a policy required level.

There are some cases that you can pay your own homeowner’s insurance separately from the mortgage payment. Take note that insurance costs will be have a tendency to increase (per month or per annum), but it would be beneficial as it allows you to divide your insurance costs into smaller and more manageable payment methods.

Mortgage Impacts Homeowner’s Insurance

Currently, lenders are needed to acquire mortgage loan insurance in a loan where the buyer’s equity in the home is less than 20 percent. However, lenders may also opt to pass the financial risk of a mortgage to taxpayers by just paying the loan insurance, even if the down payment is greater than 20 percent. The insurance is usually purchased and paid for by the lender as it helps cover the risk of mortgaging a more expensive property.

This article is more of a glimpse on the policies of a homeowner’s insurance. To know more and to get started with yours, contact us here at the Troy Dunn Insurance Group today!

Determining Insurable Iinterest In Life Insurance

Life insurance can be considered as the best purchase you can make for the people you care about. Seeing it as both a certain investment and a safety net, a life insurance guarantees you and your loved ones a form of security in case tragedy strikes.

However, securing life insurance is not applicable to all as there are requirements needed to meet before you can buy a plan for anyone.

What and Why Must there be an Insurable Interest?

A beneficiary is the key aspect when it comes to life insurance. It is defined as a person or entity that is named in the policy insurance to receive the benefits. This is where an insurable interest comes in.

An insurable interest is a reasonable concern of an insured person in obtaining insurance for any property or individual against uncontrollable events. Hence, an insurable interest is linked to ownership or relationship by law, blood, or possession.

It is important to take note that life insurance policies without insurable interest are considered null and void as this is against public policy. Without the requirement for insurable interest on life insurance policies, it may mean that some individuals are tempted to buy other people’s life insurance in order to collect financial benefits by ending the insured person’s life. This also prevents people from wagering on others’ life for money.

Before applying for life insurance, it is necessary to understand what or who may have an insurable interest. As per state laws, there are guidelines as to who are eligible to have an insurable interest. The persons could fall into three categories: people who are related by blood or marriage, people with business relationships, and the creditors.

Each person has an insurable interest in the health and life of himself or herself, any individual on whom he or she depends on for educational support, any individual on whose life any estate or vested interest depends, and any individual under a legal obligation to the person for payment of property, services or money and whose illness or death could prevent and delay such performance.

Know More About Claims and Insurable Interest Today

Here at Troy Dunn Insurance, we see life insurance as a genuine act of concern for the people in your life; and it is something to be taken seriously. Give us a call or message us here to set up an appointment or free consultation so we can help you create the best fit insurance policy according to your needs in the Fort Worth Texas area.