If I get a home equity line of credit for $30,000 will my homeowner’s insurance increase?
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UPDATED: Oct 1, 2014
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Insurance Question from Cape Coral, FL
Asked on 10/01/2014
If I get a home equity line of credit for $30,000 will my homeowner’s insurance increase? I have no existing mortgage but want to do some home improvements.
Answer given on October 13, 2014
Homeowner insurance rates are not affected if you obtain a mortgage of any kind. The lender will be added to the insurance policy at the time the loan is completed. If there is a claim for damage to the home after the lender is added, then any claim check will be made payable to you and/or the lending company, or the check may be made payable to the contracting company which will perform any repairs to the home. Be sure you understand how the loan will be handled by the lender and then call your insurance company or agent to add the company to your policy. A copy of the insurance policy will be provided to the lending company and you will receive a revised policy showing the lender as the mortgagee on the policy. Again there will be no charge for this change.
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