What Does Homeowners Insurance Cover?
Home insurance is meant to protect you and your property in the case of an unexpected loss. Home insurance has covered losses or “perils” such as fire, wind, hail, vandalism or theft. A standard home insurance policy typically covers:
- Dwelling
- Other/detached structures
- Personal property/contents
- Liability
- Medical payments
- Loss of use
Is Home Insurance Paid Through Your Mortgage?
Escrow mortgage payments include the principal, interest, taxes, and insurance. The principal and interest payments go directly to your lender. Taxes and insurance are put in an escrow account where your mortgage lender uses the money to pay your bills on your behalf.
What is an Escrow Account?
An escrow account typically serves two purposes. The first is for home-buying and the second is for taxes and insurance. Escrow accounts hold money you have designated for home insurance and property taxes. Each month you pay a specific amount above your normal mortgage payment. They hold this additional money in your escrow account to pay your taxes and insurance when they come due.
What Are the Benefits of an Escrow Account?
An escrow account makes it easy to pay all your different bills at once. When your property taxes and home insurance are due, your mortgage lender will ensure those bills are paid on time. It also takes the pressure from having to come up with your taxes or home insurance in a lump-sum payment since you are paying them throughout the year. It’s important to note that an escrow account does not cover utilities or HOA fees. Note that it is a good idea to check to be sure that your mortgagee is listed correctly on your policy and has paid your insurance premium, so there is no lapse in coverage.
Let’s Talk
Your home is your most important investment. Make sure it is protected when the unexpected happens. Contact one of our experienced Avery Hall agents today at 410-742-5111 for our Salisbury office, 302-684-3413 for Milton and 302-536-9470 for our Seaford office.