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Tuesday, February 24, 2009

Tips on Purchasing Baltimore Home Insurance

By J. Lee

If you are looking at buying a home in Baltimore, it is important to understand the importance of maintaining Baltimore Home Insurance. Unless you are paying cash for your new home, you will typically be required to have an insurance policy in place. The company you are going through for your mortgage sets this rule forth.

It is the right of the mortgage company to want to make sure that their asset is protected and by law, they have that right to demand you carry up to date Home Insurance. If by chance something terrible did happen to your home, such as a flood or a fire, the insurance money protects them as the mortgage loan will be paid off.

If you lapse in your premium, which you do not want to do, you can suffer harsh financial burdens. If your house is destroyed by disasters or accidents, you are still liable for the mortgage of the house. Even though you no longer own the house.

This has happened many times to people so it is important that you do not become one of those situations. Even though people assume that nothing bad is going to happen to them that will take away their home, there is another financial aspect to consider.

The insurance company will notify your mortgage company once your insurance policy has lapsed. Once that happens the bank normally will send three or so notices to the homeowner advising that they must reinstate their Baltimore Home Insurance right away. Failure to do so will result in what is called force placed insurance.

Force placed insurance is where the mortgage company gets their own insurance policy placed on the home. The upsetting thing about this is that most of the time this insurance premium costs an incredible amount more than you would ever pay on your own. They take that cost and attach it to your monthly payments. Because of such insurance placement, mortgage customers have seen their monthly payment amounts almost double.

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