Abram Interstate Insurance Services, Inc., CMGA

Helping Independent Insurance Agents Since 1996

Buying a New Home? Consider This…

Published on January 17, 2014

The insurance experts at Abram Interstate offer a wide variety of insurance coverage services from agricultural insurance to homeowners’ insurance. We want to make sure you are covered. We strive to keep our clients educated so that they can make informed decisions about protecting their investments.

Also known as “hazard insurance,” homeowners’ is insurance coverage that combines several personal insurance protections into one policy. It protects damage or losses to a home, it’s contents, loss of use (additional living expenses), and liability protection for accidents that may occur at the home.

Since, homeowners’ insurance is a contract of indemnity, the coverage cost depends on what it would cost to replace the house and put the insured back to the state he or she was in prior to the loss. The premiums are also determined by the likelihood of an accident or loss; if the house has a security system, if the house has modern fire detectors or fire sprinklers, if the house is near earthquake fault lines, etc. Additionally, there are two types of homeowners’ insurance contracts: term (the contract is in effect for a fixed period of time) and perpetual (no expiration date).

Most home-buyers borrow a mortgage loan in order to purchase their home. Because of their investment, mortgage lenders—mortgagees—often require proof of homeowners’ insurance as a condition of the loan. If, however, the value of the land exceeds the balance of the loan, mortgagees will sometimes waive the need for proof of homeowners’ insurance.

It is vitally important to understand the full coverage options of your homeowners’ policy as well as your mortgage conditions. Abram Interstate can help with your policy. Our agents are dedicated to helping you find the best coverage for your needs and your budget. Click here or call us today at (916) 780-7000 to find out more.