Homeowner's Insurance

Does homeowners insurance pay off your mortgage if the house is lost?


Top Answer
User Avatar
Wiki User
2016-08-08 15:46:24
2016-08-08 15:46:24

Homeowners Insurance and Total Loss.

It all depends on what type of coverage you have. If you have replacement coverage, The insurance will pay to rebuild your house so your mortgage continues as usual. If you are not rebuilding then it will pay your mortgage within policy limits. So it is important that you have adequate coverage on your policy.

If your not rebuilding, the insurance company will generally pay the Mortgage Company first before any remaining money is disbursed to the home buyer. Usually the check is issued with both the buyer and the mortgage company as payees. You must however continue to make your monthly mortgage payment until the insurance settlement comes through. If you miss monthly payments you can wreck your credit just when you need it most.

You usually will not need to pay off the mortgage yourself. The check is issued to you and the company. You send it into them, they sign off on it and send it back to you. You then endorse it to pay the contractor to keep building your new home. Meanwhile, you keep paying your mortgage. The mortgagee is only listed on the policy so they are notified if the policy is canceled so they can force place coverage on the policy because they have an insurable interest.

You have the OPTION of paying it off and taking out a new mortgage to build a new home with whatever you have left over or whatever you can afford with that new mortgage.


Related Questions

Additional damage can occur unless the house is undeniably completely lost.

No. A homeowners loss while under construction is covered by the Builders Risk Policy.

The provisions were just made available through the Obama administration. The private mortgage insurance covers job loss and allows the consumer to not only skip a mortgage but also an insurance payment.

No, Homeowners insurance does not cover the cost of lost keys.

No. Unlike auto insurance, homeowners insurance is optional and is not mandatory if your house is paid for. Just keep in mind though, if your home is lost due to fire, tornado, etc., you will not collect any kind of recovery for the loss. Also, without a homeowners insurance policy with liability coverage, you won't be covered for liability damages should someone fall or be injured in some way while at your home.

You have a home that is filled with furniture, clothes and other belongings. You worked many long years to build up equity in your home. Your home is the biggest investment you will make in your life. How do you protect that investment? If there is a fire and everything you own is lost, what can you do? In order to avoid winding up with nothing, you need to buy homeowners insurance as soon as you buy your home.If you are buying a new home, and you are getting a mortgage, then you have no choice but to buy homeowners insurance. The mortgage company or bank will make you buy homeowners insurance as part of the agreement to lend you money. They don’t want to lend money on a home that could possibly burn down. If your house burns and you have no insurance, then you and the bank would both be on the losing end. The bank can’t stay in business losing money.If you are paying cash for a home, you should still buy homeowners insurance. Once you know you are going to close on your home, get in touch with an insurance agent. If the company you deal with for car insurance also sells homeowners insurance, that is a good place to start. Have them give you an estimate for what the policy will cost. Get at lest two more estimates from other insurance companies.An insurance agent will ride by and look at your home from the outside, and most likely take a few photos of the house. You will have to provide them information on your personal goods and from there a quote will be worked out. Once he gets all the necessary information the agent will come up with the annual cost. There are variables that also come into play, such as how far your house is from the fire department or if there is a fire hydrant close to your home.Any type of insurance is a necessity, but homeowners insurance is the best insurance investment you can make. Buy homeowners insurance and protect your property and you investment. Don’t get caught uninsured

Dentures are something that is generally covered under your Health Insurance policy.

The purpose of mortgage protection life insurance is to protect the home from being lost in the event the mortgagee passes away. The life insurance will pay off the balance of the existing mortgage to the finance company.

No, comprehensive insurance only covers damage to your car. Homeowners or renters insurance usually pays for personal effects lost as a result of a vehicle accident.

you would need "all risk" coverage for the hearing aids to be covered in the event they are lost

You will need to read your policy to determine what your homeowners covers. Homeowners policies have a deductible and also demand proof of loss. During a hurricane, I lost electrical power. After the hurricane the insurance company offered to reimburse me for any food in my freezer except I had a deductible of $500. As I had food worth about $50, I did not use my homeowners. Read your homeowners. How much money did you have in your wallet. Where was your wallet when it was stolen? Was it in your house? Was there a robbery? What is your deductible?

Yes, but check your policy as there are limits and additional riders that may have to be purchased.

The answer is in your particular policy, but if it does not your renters or homeowners policy may cover those items.

If you have mortgage insurance that covers the reason of your income loss (disability, involuntary unemployment) then the insurance company will pay the premiums according to your policy's benefits schedule. If you don't have mortgage insurance, you can use savings, retirement funds, borrow money, or you can try to negociate your mortgage terms with your lender. Unfortunately, many mortgage clients believe they don't need mortgage insurance and they find themselves forced to file for bankruptcy and lose their home if something happens. The PMI (private mortgage insurance) will protect your mortgage payments and help you keep your home!

It depends on the fine print in your policy. We just lost our house to fire and at first they said we did have to rebuild on the same lot but then said the actual policy we had did not require that. So basically they will pay off the house and we will own the lAnd to either keep or sell and are free to start over on a new lot. Only stipulation is your mortgage does have to be paid in full first

need more info? they lost application? getting a reprint of a policy is very easy. if they lost the homeowners policy application that is something else entirely. did you pay any portion of the premium due? I assume you are posting because you had a loss? You may need legal consultation - insurance agents have insurance (called errors and omissions) to cover them in these types of events (assuming they are responsible)

Yes, there is depending I believe that you lost your job and did not quit. Through your present mortgage lender.

The ONE THING to be sure of when buying home owners insurance is to make sure it covers "Replacement Cost" of anything lost..

Probably not unless you had the dentures listed as scheduled property on your policy. If you have dental insurance you may have coverage there for lost or broken dentures.

A call to your insurance company describing why the shingles were lost will answer your question.

A mortgage savings account is a financial instrument that can help people pay off their mortgage loans at a faster rate than they would ordinarily be able to do so.The Mortgage Savings Account Is a LoanThe mortgage savings account is a loan that people take less time to pay, because it has a savings account associated with it. The loan has a variable interest rate and is something like the home equity line of credit, because this loan is secured by the house. The difference is that the savings account is also something like a personal bank account for the homeowners.An ExampleWhen people purchase their houses, they will obtain a mortgage loan for the amount of the house which could be $400,000. At the same time, the new homeowners will open a mortgage savings account in which they will deposit a sum of money. For this example, the amount could be $50,000. Because this is a mortgage savings account, the amount deposited has decreased the amount owed on the loan to $350,000. The interest rate that the mortgage accrues will be less, because the homeowners have reduced the amount that they owe.Making Deposits Further Decreases the PrincipleAs people deposit their paychecks into their mortgage savings accounts, they are continuously decreasing the principle on the loan. As they do this, their interest payments are also decreasing because as the principle decreases, so does the amount of the interest owed.The money that is being paid toward decreasing the principle is not lost to the homeowners. With a regular mortgage, the homeowners pay their lending institutions and they no longer have access to this money. In contrast, money that is paid into the mortgage savings account can be withdrawn from this account either by writing checks or by making withdrawals from the local ATM. But homeowners must remember that this product is a loan.The mortgage savings account would be a good option for homeowners who would not be tempted to spend too much money from this account. It is also good for those who are certain they will continue to receive their paychecks. With those too conditions met, homeowners may be able to benefit from the mortgage savings account.

A deal in Baggage Insurance can be obtained through some Homeowners Insurance carriers. There are Insurance Policies that cover lost items. An addition cost may be required and some restrictions may apply.

Special form insurance covers all risks of lost of the home, except for those that are exempt. It is a broader coverage available in Cause-Of-Loss forms.

It would depend on the specific clauses of the policy, and in many cases it would not be covered.

Copyright © 2020 Multiply Media, LLC. All Rights Reserved. The material on this site can not be reproduced, distributed, transmitted, cached or otherwise used, except with prior written permission of Multiply.