If you have a mortgage, it’s likely that your lender will require you to purchase homeowners insurance. Often, its cost will be rolled into your monthly payment, along with property taxes. If you do not purchase homeowners insurance on your own, lenders may "force place" insurance on the property, often at an extremely high cost to you.
One of the justifications lenders give for the high cost of forced-place premiums is to protect their investments. After putting up the money you used to purchase your home, they don’t want something like a natural or man-made disaster to damage or destroy the property before they get a chance to collect that money back through premium payments. Because force-placed insurance is often considered “high risk” by private insurers, the premiums usually come at a higher price.
This policy, however, has come into question in recent years, and several state insurance departments are considering changes in regulation to ensure that the pricing becomes more competitive.
Do you need Fredericksburg home insurance for your new house? Give Tabitha Walker a call at 540-657-5633 today!
Source: http://www.thesimpledollar.com/homeinsurance/