Losing your home insurance can have very serious implications for you, especially when your house is on mortgage. Every mortgage lender requires you to insure your house to protect their interest.
Once you lose your home insurance for any reason whatsoever, the mortgage company is informed that there is no coverage on the house. Immediately they will take force-placed or lender’s insurance, so that their investment I protected in case the house gets damaged or destroyed due to fire or flood.
Now this forced insurance is several times more expensive than your regular home insurance which you can buy from any independent home insurance broker.
The lender will add the premium of this insurance to your monthly loan repayment installments. Thus it will turn out to be a very expensive proposition for you.
In case you lose your home insurance for whatever reasons; you and your lender will receive the notice of closure with a thirty day notice.
It is in your interest to immediately contact an independent home insurance broker or any other company and get new insurance. Then you should immediately inform your lender with a copy of your home insurance for their record. Failure to so, will force them to go for force-placed or lender’s insurance, which will turn out to be very costly for you.
To avoid this unnecessary financial load, it is wise to keep your home insurance update and valid.