Mortgage insurance protects the home in the case of damage, theft or accident. The insurance policy needs to cover the cost of the home if it were destroyed by fire or any other disaster. The insurance policy covers a certain amount for your personal belongings and it does have a medical clause as well. If you do not keep insurance on the home, the mortgage company will place their own insurance on the home, which can cost ten times more than what it costs you with private insurance and your belonging are not covered. This amount is added on to your mortgage payment.
When looking for mortgage insurance, you need to find a company that will give you the best possible rate and policy. If you have personal belongings that are antiques or collector items, you may need to have an appraiser give you written documentation as to the cost of the item. All items of value should be appraised before determining an amount for the personal belongings.
The policy will also cover medical and comprehensive. If someone slips on your sidewalk and sues you, you need to have comprehensive and medical to cover the costs. If your dog jumps through the window and bites someone, you need comprehensive and medical. It is important that you have enough mortgage insurance to cover anything that could cost you money out of pocket.
Your insurance rates are determined by the amount of the policy and the size of the deductible you have. Your credit score also play a part in determining the rates as well as if you have other policies with that same company. Your mortgage insurance payments can be made by the mortgage company if you have it escrowed or by you if you have different insurance policies combined together for payment options.
