Homeowner's Insurance
Property insurance that covers losses to the dwelling, personal belongings, and liability, required by mortgage lenders.
Lenders require homeowner's insurance to protect their collateral. A standard policy (often called HO-3) covers the dwelling against named perils like fire, wind, hail, and theft, plus liability if someone is injured on the property. Personal property coverage is included, usually at a percentage of the dwelling limit.
Common exclusions include flood and earthquake, which require separate policies in affected areas. Lenders in flood-prone areas require flood insurance through the National Flood Insurance Program or a private carrier.
Premiums depend on location, dwelling replacement cost, deductible level, claim history, and credit (in most states). Shopping multiple carriers at the same coverage levels can yield significant savings, and bundling with auto insurance often unlocks further discounts.
Related terms
Other terms you'll see alongside Homeowner's Insurance
A lender-managed account that holds funds for property taxes and homeowner's insurance, paid in monthly with your mortgage.
Items paid at closing for costs that will be due in the future, such as property taxes and homeowner's insurance.
The four components that make up a typical fully-escrowed monthly mortgage payment.
An annual tax levied by local governments on real estate, based on the property's assessed value.
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