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Frequently Asked Questions About InsuranceAdditional Questions
Why do I need Homeowner's insurance? Homeowner's insurance (also called fire and hazard insurance or property insurance) covers your house in case of loss by fire, storm, vandalism, etc. It also covers your liability for personal injuries that might happen to someone while on your property. Premiums for this insurance are included in your monthly payment and are paid from your escrow account. Your copy of the Homeowners policy should be kept in a safe place where you can get to it easily. Immediately notify WHEDA if you change insurance companies or if any unusual situations arise concerning your property insurance. It is important that you notify us immediately in the event of damage to your property or liability claims against your policy. Please make sure your insurance bill is set up to be sent to and paid by WHEDA. If we do not receive an annual bill or notice from your Homeowners insurance company that the insurance is paid, we assume that the insurance has either been cancelled or has lapsed. In either case, WHEDA will place insurance on the Home. This insurance, payable by you, is very expensive and only covers WHEDA's interest in the property. Why is private mortgage insurance (PMI) required? Mortgage insurance is required for any mortgage where the buyer has a downpayment of less than 20%. A low downpayment loan is considered a greater risk for the lender, and mortgage insurance protects the lender against their risk of loss due to default. Annually, you will receive a statement informing you of your eligibility to remove PMI. Premiums for this insurance are included in your monthly payment and are paid from your escrow account.
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