Understanding Home Owners Insurance and How it is Paid on a Purchase

Transcript

Hello, this is Scott Dill from Texas Home Loans, and today we’re talking about your insurance that you pay when you purchase a home. Before you purchase a home, you’ll need to talk to an insurance agent and decide on what insurance policy that you want. You’ll have to have the appropriate amount of coverage and you can add other things.

Maybe you have other items you want to ensure. But once you decide that with your insurance, You let us know and we have to get what’s called a declarations page, a deck page from that insurer, and then we submit that in for your closing. One year of the insurance is paid at your closing, and this is whether you do an escrow account or don’t do an escrow account.

Then each year, your one, that one year anniversary, your insurance will be due again. So if you paid 1500. And the bill is another $1,500. One year. From that closing date, you’ll be due again, if it’s with your escrow account, it’ll be paid automatically through your escrow account. You wanna monitor the escrow escrow account and make sure that they do pay it.

You can see who they pay and when they pay and how much. And if it’s late with your insurance company, let’s say the payments don’t get sent correctly usually you’ll be notified on that. So hopefully that explains how insurance works with your purchase. But one year ahead, you’re paid ahead on your insurance when you purchase a home.

Thanks.