Bayport Mortgage Homeowners Insurance

You cannot close your home loan until you have proof of homeowners insurance. And if you own your home outright, then it is vitally important that you protect your investment against fire and other potential disasters. To learn more about insurance coverage available to meet your needs, visit the Western Mutual Website at www.westernmutual.com.

There are three basic levels of homeowners' coverage:

• Actual Cash Value
  Your home is covered for the depreciated amount of the replacement value at the time of loss.
  
  
• Extended Replacement Cost
  Your home is insured up to a specific cap. Say, for instance, your home was destroyed by a fire and needed to be rebuilt. If your policy is for $200,000 and it has a $250,000 cap, the extended replacement coverage might pay up to $250,000 worth of the rebuilding costs.
  
  
• Guaranteed Replacement
  With this coverage, there is no cap or maximum pay-out on guaranteed replacement. Although it may cost more, this is the best coverage if you have made substantial improvements or if your property value has appreciated greatly. No matter what the original worth of your home, in the event it is damaged or destroyed, the coverage will pay to restore it to the condition of its current worth.

Escrow Impound Account
Escrow impound accounts are set-up and held by the lender to collect and reserve in advance funds to cover your property taxes, insurance, Mello-Roos and other future expenses. Expect to advance the equivalent of two months of homeowners insurance and the required number of months of property taxes determined by a tax impound schedule. Typically, lenders will also collect a two-month cushion for taxes and hazard insurance. The lender then disburses payments on your behalf from the accumulated fund. In California, the law requires the lender to pay interest on the fund in your impound account.

Insuring for Your Condo or Townhome
There are two important things to know about insuring your condo or townhome. First, your homeowners association's master insurance policy only covers the outside of the structure, including the roof and common areas. This master policy doesn't insure the inside of your home or any of your personal property such as furniture, art work or appliances. You will need Condo Owners Insurance that covers any additions or changes you make to the walls, floors or ceiling of your unit, as well as covering the loss of personal property. You will also want Personal Liability coverage to protect you in case someone is injured in your home.

Your Insurance Agent can recommend the best coverage for your situation.