Mortgage lenders depend on their borrowers to keep the homes they finance in good condition. Though homeowners’ insurance can help do just that, there are times when homeowners fail to carry enough coverage or neglect to insure the property at all. When this happens, mortgage hazard insurance can help protect lenders’ interests and ensure that the home stays in good condition at all times.
What Hazard Insurance Is
Hazard insurance for mortgage lenders is a type of property insurance that protects homes with outstanding loans. The policy covers incidents like floods and other natural hazards should the homeowner default on the loan and go into foreclosure. The policy also provides additional coverage to protect the lender once they take possession of the property. These include the following coverage options:
- General liability
- Multi-family and condominium insurance
- Builder’s risk for incomplete structures
- Wind and hailstorm coverage
These coverage options ensure that lenders will be able to get as much as possible for the home once they’re able to put it on the market. They’ll be able to take care of any necessary repairs without putting strain on their operating budget.
Protect Your Interests at All Costs
Every home that buyers finance is collateral for the loan itself. Make sure you’re protecting your interests as a loan provider by investing in the proper mortgage hazard insurance.