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The Difference Between Forced Place And Traditional Home Insurance NJ
Article by Brenda Fullwerth
If you have a mortgage on your home and you reside in the state of New Jersey, your lender will require that you carry continuous home insurance NJ coverage. If you let your policy lapse or fail to pay your insurance, the lender has the right to force place home insurance coverage that will cover only the dwelling. Forced place insurance is very expensive and does not provide you with traditional coverages that are included in a homeowners insurance policy offered by a personal lines insurance company. Understand the differences between forced place insurance and traditional home insurance and prevent paying far more for far less.
When a mortgage company force places home insurance, the only thing they are concerned with is whether or not the property they have a financial interest in is covered. Because of this, they will purchase and assess a non-traditional insurance policy that provides online Dwelling insurance. The dwelling insurance supplied will be through an affiliate insurance company that does business with the mortgage company. Because this is a non-traditional policy, it is considered a form of high risk insurance. High risk insurance will cost more even when less coverage is provided.
Home insurance NJ will cover far more than forced placed insurance. Not only will it provide coverage for the Dwelling, it will also provide coverage for your belongings, liability, and loss of use. All of these coverages are designed to protect you in the event of a loss. Because the mortgage company is not concerned with your well being if you have a loss, it is understandable that they will not explain this in detail. They are making money on both the forced placed insurance and the mortgage note, so as long as they know there is coverage on the property they are satisfied.
Liability coverage is extremely important when you own a home. This coverage will protect you in the event of a negligence lawsuit where you are accused of being negligent for damages and injuries. If you face a lawsuit and do not have this coverage, you could lose your home and all of your assets and be assessed a judgment in favor of the third party who suffered losses. Because forced placed insurance does not provide the standard 0,000 of personal liability insurance that is included in a home insurance NJ policy, you are putting yourself at risk.
Failing to carry traditional home insurance NJ could be one of the biggest mistakes you could ever make. If you currently do not have insurance that has been sent a letter from your lender stating they are force placing insurance, obtain insurance immediately. Save money and receive more coverage by purchasing your own home insurance.
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