occur. In addition to paying one year's worth of coverage upfront at closing, most lenders will also require you to escrow the future cost within your monthly mortgage. This way the insurance company will always have one year's premium in case you run into financial difficulties. A standard homeowner’s insurance policy generally protects against: • Fire and lightning • Damage from hail and windstorms • Theft and vandalism • Smoke damage • Falling objects, like tree branches • Damage from the weight of ice, snow, or sleet • Frozen plumbing, heating, AC, or other household systems • Vehicles (and even aircraft), not the vehicle itself, which is covered by auto insurance, but damage from vehicles, e.g., in the event a car runs into your home. • Explosions Homeowner’s insurance policies also generally include coverage for liability, personal belongings, other structures on your property like carports and fences, and additional living expenses if your home becomes temporarily unlivable. You may also choose to set up an escrow account, depending on your mortgage agreement, to avoid paying large sums for homeownership costs. Essentially, an escrow is a savings account designed to help you pay your mortgage, property taxes, and even homeowner’s insurance in smaller (monthly), periodic installments. Your lender usually deals with payments from your escrow, which means less stressful financial management for
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