Homeowners Insurance

For a Refinance transaction, please have your current insurance agent contact:

Apex Home Mortgage
3204 Tower Oaks Boulevard #400
Rockville MD 20852
ATTN: Heather Seidenberg
O. 240-268-3454
Fax 240-268-3247
hseidenberg@apexhomeloans.com.

Your insurance agent will need to get a copy of your current policy to us, and we’ll get your insurance agent the name of the new bank, which they will put on the current insurance policy.

For a Purchase transaction, start shopping well in advance of settlement for your homeowners insurance. An insurance policy and a paid receipt showing the first year has been paid in advance, are required 5 days prior to settlement. You will be required to pay the first year in advance, as well as several month’s of the annual premium into an escrow account. The lender usually requires that you escrow for homeowners insurance so that you are covered into the future.

Be aware that insurers have access to databases that combine claims data from many companies. Some insurers even go as far as checking your credit to quote you an annual premium for homeowners insurance.

Homeowners insurance policies typically cover what is known as “replacement cost” and not, as is sometimes thought, market value. “Replacement cost” is the amount needed to repair the damage or rebuild the home to its pre-loss condition. For insurance purposes, the replacement cost of a home is NOT the market value of the home, its purchase price, or the outstanding amount of any mortgage loan. It does not include the value of the land, but is the cost of rebuilding your home. A contractor or appraiser can help estimate your home’s replacement cost. We can get a copy of your appraisal to your insurance agent, which has an estimate of replacement cost.

If you are purchasing a condominium, the insurance is part of a “Master Umbrella Policy” that covers the whole building, and payment for this is included in your condo fee. So you do not have to shop for an insurance policy that covers the dwelling/structure. However, you will want to get insurance to cover your belongings. This is similar to a “renters policy”, and may also be called a “contents coverage policy”. If you experience a theft of belongings out of your condo, the insurance that the condo carries on the dwelling will not cover you, so this additional “renters” policy is a good idea. And, if you are buying or are refinancing a condo, you may need an “HO6 policy” to cover interior features and upgrades, which you can read more about here: HO6 Policy.

A homeowners insurance policy will cover you in the event of a loss due to fire, theft, and more. Be sure to get an exact accounting for what you are covered for under your insurance policy. The insurance requirements are usually that you have coverage for at least the amount of the loan, or have a “guaranteed replacement cost policy”. This type of policy means that your house would be rebuilt, no matter what the cost. Some insurers have a policy where they start out with a certain amount of coverage, and offer annual inflation adjustments to cover increased building costs. This type of policy is fine too, as long as the initial coverage covers the amount of the loan.

In shopping for the lowest premium, be very careful to compare apples with apples. The things you must hold constant in getting quotes from different carriers are the deductible and the amount of coverage. Higher deductibles carry lower premiums. Consumer Reports suggests carrying a high deductible. The logic is that you should only be using your insurance for large claims and major losses. If you have a bike stolen, you should buy a new one on your own without making a claim. But if a fire means you lose all your furniture, rugs, electronics and more, by all means, pay the deductible and make a claim. Homeowners insurance should not be used as a way to budget for minor mishaps, such as a falling tree, or bike theft.

The typical homeowners policy does not cover flood damage as defined by the National Flood Insurance Program. That definition is: A general and temporary condition of partial or complete inundation from overflow of inland or tidal waters or unusual and rapid accumulation or runoff of surface waters from any source.

In the event of a catastrophe, how will you know what you have lost? It is recommended you do a complete inventory of your belongings. Start by taking video or still photos of each room and then committing all major items to paper. Record brand, model, date of purchase, and purchase price. Also record serial numbers and save receipts for big ticket items. For antiques and jewelry, written descriptions and appraisals are important. Don’t forget to look in your closets and attics. Your insurance agent can provide you with checklists to make the process easier, and remember to store the video, pictures, and paper inventory in a safe location away from your home.