Get A Home Insurance Binder For Your Purchase Or Refinance Mortgage Closing in MA, NH, VT or NY

What is a home insurance binder?

When you buy a new home or refinance the mortgage, you need proof of insurance to proceed with the mortgage closing. A property insurance binder is a temporary policy which acts as a placeholder until your formal house insurance policy is issued. This binder provides proof to your mortgage lender that you have sufficient insurance coverage in place.

Why is a home insurance binder required?

Banks, Mortgage Companies, Credit Unions and Mortgage Brokers all require that present you homeowners insurance binder, proving adequate coverage prior to the scheduling of your purchase or refinance mortgage closing. Additionally, a receipt for payment in full of the first years premium is also required.

Home insurance protects you and the lender from hazards

Most lenders require that the insurance binder cover 100% replacement cost for the dwelling. So your home insurance policy is often called your hazard insurance policy, as it would pay to rebuild your home in the event of a fire or natural disaster. From the lender's point of view, they will not lend money to you to buy the house unless their investment is fully protected from the aforementioned hazards.

Why is escrow payment often required?

To further protect their investment, most mortgage lenders will collect the insurance premium due on a monthly basis,  added to your mortgage principal and interest payment due. That way they can pay the annual premium due every 12 months to make sure the house is always insured. This is also why property tax payments are often escrowed in your monthly mortgage payment, as the only lien that can supercede a mortgage lien is a tax lien.

The agency advantage

As Pearson Wallace is an independent agency, you get to work with an assigned agent who will help you shop for the best policy from our pool of insurance carriers. Having multiple insurance carriers to choose from is how we can consistently offer the best rates and terms. Better yet, we can also deliver an insurance binder much faster than a direct insurer as your agent will provide responsive, personalized service to generate all paperwork needed by your mortgage lender.

The right policy at the right price

Getting the proper insurance coverage for your new or existing home is the most significant decision that you will ever make in regard to protecting your real estate investment and personal property as it covers all the things inside your home. As you know, different people have different needs when it comes to the coverage of their belongings in their home, thus you need to choose carefully in order to get the best coverage option. The process of choosing a policy usually starts by getting a quote from a number of different insurance carriers. Once we generate this quote for you, we will then explain exactly what is covered along with how much reimbursement you would receive in the event of a loss. It is important to compare the price and benefits of each policy that you are offered so that you will be able to get the most suitable one for your needs.

We represent the best insurance companies

There are a number of insurance companies out there that specialize in insuring home insurance policies and the rates they are offering is quite competitive. At Pearson Wallace, we only deal with the most reputable and trustworthy insurers that have been around for a long time. Our value add to the insurance transaction is that we are willing to take as much time as you’ll need to assist you in choosing a suitable policy from one of our many reputable insurers. We will also be in a position to answer any specific questions that you may have regarding the various policies available in the market.

Balancing policy cost, premiums and deductibles

One thing that homeowners must remember is to never settle for a cheaper insurance policy just because the premium seems low. There are a number of insurers who will offer lower premiums even if the policy has many exclusions in it or which features unreasonably high deductible. In fact, there are also some homeowners who have faced financial problems after a loss as they cannot afford to either pay the deductible. If you fall into this category of homeowner and are concerned about policy costs vs deductibles, do not worry as there are still some ways by which you can reduce the cost of your homeowner's insurance policy and/or the required deductibles.

Need a home insurance binder FAST?

It is sometimes the case with a mortgage transaction that the mortgage lender will reject your insurance binder if the coverage is inadequate. Or, you may have difficulty getting your current insurance company to get you an updated insurance binder with either the proper coverage or the corrected loss payee details needed for your mortgage closing. If you are up against a time deadline give us a call now at (413) 464-9390. We will respond quickly to get a binder with the proper wording and coverage to you, your lender or closing attorney or title company. Located in Massachusetts, Pearson Wallace serves New Hampshire, Vermont and New York homeowners.