If you are in the process of buying a home in the state of Maryland, it is important to understand the process to ensure you have everything in order when you home is ready to close escrow.  If you are obtaining a mortgage on the property, your lender will require that you purchase home insurance Maryland before they will hand over the keys.  Many applicants overlook the importance of obtaining home insurance in advance and find themselves binding quotes with high premiums just to satisfy the requirements of their lender.  If you are a wise applicant, you will research what lenders are looking for so that your insurance does not delay the closing of escrow.

Mortgage lenders are mainly concerned with the amount of dwelling coverage you bind.  Dwelling coverage will pay to rebuild or repair your home in the event of a covered loss.  While the lender may not require you to cover the property for financing, they will require you purchase adequate coverage to rebuild the home.  Because the land is not covered, your dwelling insurance may be lower than the selling price the home.  It is important to see if the lender required extended replacement cost coverage that will cover the rising cost for supplies and labor when rebuilding your home.

When you are purchasing home insurance Maryland policies, you will have the option to choose a higher deductible to lower your premiums.  Deductibles range from 0 to as much as ,000 depending on the amount of dwelling coverage you are purchasing.  While a high deductible may offer attractive premiums, it is important to check with your lender to see if they have a maximum deductible requirement.  They may not accept high deductibles if they feel you will not be able to pay for these deductibles if you have a loss.

The last thing to research is how the lender wants to appear on the policy.  The mortgagee clause must appear word for word on the policy declarations page.  This shows that the mortgagee will receive payment if the home deemed a total loss and protects their financial interests in the property.  If this is not listed properly, it could delay your home closing.

Always take proactive steps to ensure you are binding a comprehensive policy that protects your dwelling, personal property and liability interests.  While there are several areas of a home insurance Maryland policy, these are the areas that a lender will review before closing escrow.  They may also require that you obtain insurance from an A rated insurance company so that you are purchasing coverage from a financially stable provider.  Receive quotes and provide proof of insurance to your lender to ensure everything goes smoothly.

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