Insurance terms and policies
Insurance is one of the most important considerations when purchasing any kind of property. Insurance has the power to protect your loan against any type of damage. Before selling the loan in the market, it should be covered by an insurance policy. The policy must be kept up to date, and all premiums should be paid on time to avoid cancellation of the policy. There are some terms and conditions which should be followed regarding property insurance.
Property insurance must meet the requirements of Fannie Mae, Freddie Mac, or Ginnie Mae. If the policy is not written according to their terms, then the guarantee cannot be given by the agency. Insurance can be divided into several different categories.
This type of insurance protects against damage to the property. Hazard insurance, which covers natural calamities, comes under this category. Other losses covered under this type of policy include damages from human error, damage caused by constructing the asset, and damage to any machine parts such as engines or boilers.
This type of insurance covers an asset if there is any damage caused by an employee. This is also known as fidelity bonding.
Mortgage error and omissions insurance
This type of insurance covers the property from any negligence or omission of any rules by a mortgage banker or broker.
This type of insurance covers all personal injury which takes place near an asset.
This is a type of insurance which is required by state law. If there are any wages lost because of personal injury in the workplace, they will be recovered with the help of this insurance policy.
Terms and conditions
There are some terms and conditions which should be followed after obtaining the policy. The entire premium must be paid in order to continue the policy and prevent it from expiring. Also, when demanded, original or attested copies of the insurance policy must be produced by the lender.
These are the most common types of insurance policies and their respective terms & conditions. If any of these terms and conditions do not exist, then the policy is not a correct one, and is null and void in a court of law. For more information on claims, refer to the next article.