topic Re: Home Insurance in Mortgage Loans

Home Insurance

Anonymous — Tue, 22 Apr 2008 19:39:51 GMT

I just purchased a home for 319000 in new jersey. How much home insurance should i have. Any thoughts?

Re: Home Insurance

Lel — Tue, 22 Apr 2008 22:11:12 GMT

I'm surprised that you weren't required to have homeowners insurance in hand at the time of closing. Lenders usually require that. Of course, if you bought it outright with cash, then maybe it wasn't required.

Anyways, an insurance agent or a local builder should be able to tell you what it would cost to rebuild the home from the ground up. Usually they will quote this on a per-square-foot basis. You would need to provide them with any details that would affect this estimate. For example, if you have a Spanish tile roof, granite countertops, exotic hardwood floors, etc., the rebuilding cost could be substantially higher than a lesser-appointed home.

Other things you need to consider are your contents (personal property), liability (e.g. if the mailman trips on a hose in your yard and breaks his neck), and loss of use (e.g. your house burns to the ground and you have to rent a place while it gets rebuilt). You (and a local insurance agent) would be the best judges of this.

For us, we have coverage for our home that estimates a rebuilding cost of $250 per square foot. We have a fairly modest home, but it does have some upgrades that boosted the replacement cost. Some unfortunate people down in San Diego found out the hard way that their homes were underinsured after the fires last year.

Re: Home Insurance

Anonymous — Tue, 22 Apr 2008 23:59:41 GMT

I also can't believe you didn't have to have it before you closed!

We bought our house for 283 and they insured it for 255 which is what they said it would cost to rebuild plus the contents are insured for 50k. And then we also had to get a wind and hail policy b/c our house is on the coast of NC. They told me how much insurance I had to have, I had very little to do with that.

Re: Home Insurance

kiminno — Wed, 23 Apr 2008 00:42:29 GMT

Indeed, required for closing. Homeowner's insurance is holding me up this week (scheduled to close Friday). The original new company I planned to go with rejected my application yesterday, so I have to pay more with the state gov't plan, my only other option. So, I also have to go thru underwriting again, GRRR, with the new monthly housing expense, that includes this insurance rate.

Don't go uninsured. Lots of people here too have learned their lessons the hard way. Your individual rates will depend on the value of your home, your loan, and where you live. Lucky me, ha, in suburban New Orleans post-Katrina.....I get to pay thousands each year for homeowners and flood. And if you look at all the spring flooding this year, well, you know flooding can happen anywhere. Homeowners won't pay a dime for flooding.

Re: Home Insurance

ShanetheMortgageMan — Sat, 03 May 2008 00:09:58 GMT

I'm thinking Smarty already has insurance, just wondering what the adequate coverage should be. In my opinion it should be the full replacement cost of the home, this would be determined by the insurance company issuing the insurance - and most policies already cover full replacement costs so you probably already have adequate coverage.