Do I Need To Get My Condo Insurance Through My Mortgage Lender?

Most lenders won’t provide coverage for a unit that you own. Thus, you’ll probably want to purchase condo insurance through a third party. 

Some lenders may offer a condo owner’s policy, but make sure to compare the cost and coverage of that policy to the cost of purchasing condo insurance through a third party. For questions in Plymouth, MN, don’t hesitate to visit Anchor Insurance Agency LLP. 

What Much to Know 

If you’re financing your purchase, you may want to consider a warranty program. These programs typically have a minimum purchase amount and may not cover anything above that amount. 

Most lenders require that the mortgage be insured through the Lender’s policy. If you decide to go with a non-Lender’s policy, you will need to get a quote and ensure that it meets your needs. 

The majority will require that a certain percentage of your closing costs be paid with a credit card, cashier’s check, or other non-mortgage payment methods. If your regular mortgage payment does not meet this requirement, you may need to find an alternative lender. 

Most mortgage lenders require that their clients purchase condo insurance on top of their mortgage package. This is because condo units are legally protected in the same way as residential homes. 

You will likely have to foot the bill if your condo is damaged or destroyed. Keep in mind that condo insurance may cost between $10 and $20 per month, depending on your mortgage rate and the value of your unit. 

Some lenders require buyers to purchase condo insurance, while others prefer that the buyer purchase their coverage. Condos are a higher risk than most homes because they’re multi-unit buildings. 

If you’re living in a condo, it probably makes sense to get your insurance. 

Key Takeaways 

Suppose you have a mortgage through a broker or a licensed lender. In that case, your mortgage broker or licensed lender will be responsible for ensuring your mortgagee (the lender) has the correct amount of insurance on your property. 

Most mortgage companies will require that the mortgagee have some form of condo or building insurance covering the building. 

Most lenders require that the mortgagee have condo insurance on the building in the amount of at least 10% of the value of the building. For help in Plymouth, MN, Anchor Insurance Agency LLP is your pal.