Call Us 530-221-2300 ☰ ˟
Logo
Call Us 530-221-2300
  • HOME
  • Our Agency
    • AboutImage of right arrow
      • Our Staff
      • Our Location
    • Personal ProductsImage of right arrow
      • Home & Auto Insurance
      • Auto InsuranceImage of right arrow
        • Liability Coverage
        • Comprehensive Coverage
        • Collision Coverage
        • Uninsured & Underinsured Motorist Coverage
        • Minor Violation Forgiveness
        • Roadside Assistance
        • Specialty Auto Insurance
        • 24-Hour Customer Service
        • Towing
        • Rental Reimbursement
        • Mexican Auto Insurance
        • Medical Payments Coverage
      • Home InsuranceImage of right arrow
        • Property Insurance
        • Homeowners Liability
        • Renters Insurance
        • Condo Insurance
        • Mobile Home Insurance
        • Scheduled Property Insurance
        • Landlords Insurance
        • In-Home Business Insurance
      • Other Personal InsuranceImage of right arrow
        • Identity Theft
        • Personal Umbrella Insurance
        • Data Backup
      • Farm InsuranceImage of right arrow
        • Farm Owners Insurance
        • Farm Livestock Insurance
        • Equine Insurance
        • Farm Equipment Insurance
        • Farm Dwelling Insurance
        • Farm Structures Insurance
        • Farm Auto Insurance
        • Farm Umbrella Insurance
        • Farm Liability Insurance
      • Recreational Vehicle InsuranceImage of right arrow
        • Boat Insurance
        • Motorcycle Insurance
        • Motorhome Insurance
        • ATV Insurance
        • Snowmobile Insurance
      • Additional Insurance ServicesImage of right arrow
        • Special Event Insurance
        • Other Services
    • Commercial ProductsImage of right arrow
      • Coverage for Specific IndustriesImage of right arrow
        • Accounting Firm Insurance
        • Alarm Contractors Insurance
        • Insurance for Arborists
        • Construction Insurance
        • Consulting Firm Insurance
        • Specialty Trade Contractors Insurance
        • Craft Brewery Insurance
        • Educational Facility Insurance
        • Financial Institution Insurance
        • Healthcare Facility Insurance
        • Healthcare Practice Insurance
        • HVAC Contractors Insurance
        • Law Firm Insurance
        • Life Science Insurance
        • Limousine Services Insurance
        • Livestock Insurance
        • Maintenance Contractors Insurance
        • Manufacturing Insurance
        • Maritime Employers Insurance
        • Media & Advertising Insurance
        • Orthotics & Prosthetics Insurance
        • Pool & Spa Insurance
        • Printers & Publishers Insurance
        • Railroad Contractors Insurance
        • Real Estate Businesses Insurance
        • Retail Insurance
        • School Bus Contractors Insurance
        • Scrap Metal Insurance
        • Security Guards Insurance
        • Self-Storage Insurance
        • Septic Contractors Insurance
        • Specialized Truck Equipment Insurance
        • Technology Services Insurance
        • Tow Trucks Insurance
        • Water Well Drillers Insurance
      • Coverage for Your BusinessImage of right arrow
        • Leave Management
        • Loss Control Insurance
        • Marine Insurance
        • Business Owners Policy (BOP)
        • Commercial Auto Insurance
        • Commercial General Liability
        • Commercial Property Insurance
        • Commercial Umbrella Insurance
        • Crime Insurance
        • Inland Marine Insurance
        • Professional Liability
        • Workers Compensation
      • Coverage for Your EmployeesImage of right arrow
        • Group Benefits
        • Group Disability Insurance
        • Group Health Insurance
        • Disability Insurance
        • Individual Life Insurance
    • Get A Quote
    • Our Providers
  • Products
    • Home & Auto Insurance
    • Auto InsuranceImage of right arrow
      • Liability Coverage
      • Comprehensive Coverage
      • Collision Coverage
      • Uninsured & Underinsured Motorist Coverage
      • Minor Violation Forgiveness
      • Roadside Assistance
      • Specialty Auto Insurance
      • 24-Hour Customer Service
      • Towing
      • Rental Reimbursement
      • Mexican Auto Insurance
      • Medical Payments Coverage
    • Home InsuranceImage of right arrow
      • Property Insurance
      • Homeowners Liability
      • Renters Insurance
      • Condo Insurance
      • Mobile Home Insurance
      • Scheduled Property Insurance
      • Landlords Insurance
      • In-Home Business Insurance
    • Other Personal InsuranceImage of right arrow
      • Identity Theft
      • Personal Umbrella Insurance
      • Data Backup
    • Farm InsuranceImage of right arrow
      • Farm Owners Insurance
      • Farm Livestock Insurance
      • Equine Insurance
      • Farm Equipment Insurance
      • Farm Dwelling Insurance
      • Farm Structures Insurance
      • Farm Auto Insurance
      • Farm Umbrella Insurance
      • Farm Liability Insurance
    • Life InsuranceImage of right arrow
      • Individual Life Insurance
      • Group Life Insurance
      • Long-Term Care Insurance
      • Disability Insurance
      • Key Person (Key Men) Insurance
    • Health InsuranceImage of right arrow
      • Individual & Family Health Insurance
      • Group Health Insurance
      • Dental Coverage
      • Vision Coverage
      • Long-Term Care Insurance
      • Temporary Health Insurance
      • Supplemental Insurance
      • Disability Insurance
      • Medical Expense Insurance
      • Child Health Insurance
      • Prescription Insurance
      • HSAs
    • Recreational Vehicle InsuranceImage of right arrow
      • Boat Insurance
      • Motorcycle Insurance
      • Motorhome Insurance
      • ATV Insurance
      • Snowmobile Insurance
    • Coverage for Specific IndustriesImage of right arrow
      • Accounting Firm Insurance
      • Alarm Contractors Insurance
      • Insurance for Arborists
      • Construction Insurance
      • Consulting Firm Insurance
      • Specialty Trade Contractors Insurance
      • Craft Brewery Insurance
      • Educational Facility Insurance
      • Financial Institution Insurance
      • Healthcare Facility Insurance
      • Healthcare Practice Insurance
      • HVAC Contractors Insurance
      • Law Firm Insurance
      • Life Science Insurance
      • Limousine Services Insurance
      • Livestock Insurance
      • Maintenance Contractors Insurance
      • Manufacturing Insurance
      • Maritime Employers Insurance
      • Media & Advertising Insurance
      • Orthotics & Prosthetics Insurance
      • Pool & Spa Insurance
      • Printers & Publishers Insurance
      • Railroad Contractors Insurance
      • Real Estate Businesses Insurance
      • Retail Insurance
      • School Bus Contractors Insurance
      • Scrap Metal Insurance
      • Security Guards Insurance
      • Self-Storage Insurance
      • Septic Contractors Insurance
      • Specialized Truck Equipment Insurance
      • Technology Services Insurance
      • Tow Trucks Insurance
      • Water Well Drillers Insurance
    • Coverage for Your BusinessImage of right arrow
      • Leave Management
      • Loss Control Insurance
      • Marine Insurance
      • Business Owners Policy (BOP)
      • Commercial Auto Insurance
      • Commercial General Liability
      • Commercial Property Insurance
      • Commercial Umbrella Insurance
      • Crime Insurance
      • Inland Marine Insurance
      • Professional Liability
      • Workers Compensation
    • Coverage for Your EmployeesImage of right arrow
      • Group Benefits
      • Group Disability Insurance
      • Group Health Insurance
      • Disability Insurance
      • Individual Life Insurance
  • Get A Quote
    • Auto Insurance Quote
    • Bond Request Form
    • Business & CommercialImage of right arrow
      • Builders Risk
      • Business Owners (BOP) Quote Form
    • Commercial Auto Insurance Request
    • Contractors Insurance Quote
    • Homeowners Insurance Quote
    • Workers Compensation Insurance Request
    • Watercraft Insurance Quote
  • Resources
    • Refer a friend
    • Important Links
    • Insurance Glossary
  • About Us
    • About
    • Our Location
    • Employee Directory
    • Testimonials
    • Privacy Policy
  • Contact
Home > Blog > Have a Mortgage? You Need Homeowner’s Insurance
WEDNESDAY, APRIL 26, 2023

Have a Mortgage? You Need Homeowner’s Insurance

Very few people can afford to pay for a new home in cash. That’s why most home buyers finance their home with a mortgage or other property loan. Once you take out a loan, it is your responsibility to repay it to the bank over the years.  
Homeowners Insurance
However, what happens if something happens to your home in the meantime? Various hazards could cause significant property, and sometimes those hazards might destroy the home. As a result, both the homeowner and the lender might lose the investment they have made in the property. Still, that doesn’t mean you are off the hook to pay off the rest of your mortgage. 

To protect their investment in your property from such hazards, most lenders require property owners to carry homeowners insurance. Usually, this requirement will mean buying dwelling coverage worth at least your home’s replacement cost value. However, some policies pay for your dwelling based on its actual cash value, and you likely won’t be able to buy this coverage. Here’s how each works. 

Actual Cash Value Coverage  

This is often the cheapest form of protection available for your dwelling. When deciding how much money to issue following a claim, your insurer will consider the home's depreciated value, rather than the value necessary to rebuild the home like new.  

A home’s structural value often decreases over time (often even if property values increase). Think of this depreciation in the same way you would a car that loses value the older it gets. Therefore, the money you receive in the end might not be enough to fully repair the home. Most homeowners policies these days do not offer this coverage. Therefore, it is exceedingly rare to find, and most mortgage lenders require buyers to purchase more coverage anyway. 

Replacement Cost Coverage 

Replacement cost coverage more closely matches the costs necessary to rebuild your home. To determine your home’s replacement cost value, you’ll need to factor in the cost of materials, labor and other assets necessary to repair or rebuild you home. So, if it will cost $300,000 to rebuild your home, then you will need at least $300,00 in structure coverage as your coverage limits. 

You might need to periodically review your dwelling coverage limit as a home’s replacement cost changes with inflation and other market differences. A failure to do so might mean that you might not be able to rebuild your home like it was before the damage occurred. 

To determine the right dwelling coverage limit, work with your insurer, realtor and lender to calculate the minimum coverage necessary. You can always buy more than this minimum coverage to provide expanded protection against even the costliest losses. The more coverage you have, the better protected your dwelling will be. 
Posted 5:54 PM

Tags: homeowners insurance
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021

  • auto insurance(11)
  • boat insurance(5)
  • home insurance(5)
  • homeowners insurance(3)
  • farm insurance(3)
  • life insurance(3)
  • coverage(2)
  • business insurance(2)
  • insurance(2)
  • belongings(1)
  • homeowners(1)
  • policy(1)
  • recreational vehicle insurance(1)
  • workers comp(1)
  • trucking insurance(1)
  • toys insurance(1)
  • bop(1)
  • bonds(1)
  • renters(1)
  • boat(1)

View Mobile Version
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Home| Get A Quote| Customer Service| Blog| About Us| Contact
850 Remor St. | Redding, CA 96002
P: 530-221-2300 | Toll Free: 877-553-2300 | Fax: 530-221-2030
Social Social
Logo

Powered by Insurance Website Builder