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Three Reasons NOT to Buy Flood Insurance

Three Reasons NOT to Buy Flood Insurance

With all of the horrifying pictures in the news of flooded cities around the country, you might be thinking about flood insurance.  If you have it, do you have enough?  If you don’t have it should you purchase it? Your insurance broker may have tried to sell you a flood insurance policy in the past, but you had a good reason to decline the coverage. After all, who wants to pay for something you don’t really need? That’s probably what all of those businesses in Houston thought, too. Here are some (not so) good excuses for declining to purchase flood insurance. Your Bank Doesn’t Require It Maybe you don’t have a mortgage on your property. Or perhaps, because of location, you aren’t required to have flood insurance to secure or maintain your mortgage. Does that mean you shouldn’t purchase the coverage? While bank flood requirements account for a large portion of flood insurance policies sales, even those without mortgages or those who are not required to purchase coverage should still consider flood insurance policies.  Why?  Because even properties where flood insurance isn’t required are still subject to flooding. If you are in a flood plain (or even if you aren’t) floods may still occur and you could be affected. Your Bank Purchased Flood Coverage “For You” Bank provided insurance (often called force-placed insurance) is when the bank either offers to insure your property or forces the coverage on you because you have failed to provide your own. Some may find this option more convenient than shopping for your own policy, but be warned: force-placed coverage does not benefit you...
Should You Buy Homeowners Insurance?

Should You Buy Homeowners Insurance?

To many people, insurance is just a necessary evil, and they buy only the bare minimum to comply with state or local laws, or with lender requirements.  This is true of both auto insurance and homeowners insurance. Auto insurance is usually required by state law, and so the driver must purchase the coverage for as long as he or she is a driver. There is no such compulsory law for homeowners insurance, but a lack of coverage can end up being more expensive than keeping coverage in force. Here are just a few ways home owners may find themselves uncovered in the event of a claim. PMI Is Not Your Insurance Private Mortgage Insurance (PMI) is NOT homeowners insurance. If you pay less than 20% down on your home, you mortgage company will require you to purchase PMI on the loan. This insurance pays the mortgage off to the bank in the event you default on the loan. There are many good reasons to avoid PMI. As any insurance broker will tell you, the best reason not to purchase is that you do not get paid under this insurance coverage. It will not replace your belongings, and it does nothing to make your family whole again or rebuild your home. This coverage also does not provide comprehensive personal liability. Should someone be injured on your property, you would have to pay those claims and legal expenses out of pocket. No More Mortgage = No More Insurance Some homeowners work with their mortgage company to include homeowners insurance in their escrow and pay the premium with their mortgage payment every...