Purchasing a SFR may be the single largest investment a person will make in their lifetime.With that in mind, it certainly makes sense to have adequate protection for this investment.Unless you paid cash for your home your lender would have required you to have homeowners insurance in place at the closing.The insurance policy you should have provided at the closing of your home purchase satisfies the minimum requirements of your lender.However, you should keep in mind that the interest you have in this real estate as a titleholder differs from that of your lender. For instance, you may notice a difference between the amount of the coverage provided by your policy from time to time and the fair market value of your property. While your lender will initially require a policy with coverage of 80-90 percent of the purchase price or the amount of the mortgage, whichever is greater, unless your policy has an Inflation Endorsement or a Replacement Cost Endorsement, you may find that the policy will pay, when you suffer a loss, the depreciated value of your property and not its replacement cost. Furthermore, to the extent that your policy limit is less than 80-90 percent of the full replacement cost of the building immediately prior to the loss, you will have to share in the cost of repairing or replacing the premises.

You may also want to consider, among other matters, the following:

• Most policies do not insure against water damage caused by water coming from outside your premises.
• Your policy may not adequately cover all of the personal property you own and that might otherwise be covered by the policy.
• If you conduct any business out of your premises, you should investigate additional coverage.

You should also carefully review the provisions of your policy regarding the time within which you must give notice to your company of any losses and the manner in which this notice is to be given. Furthermore, notice regarding any losses should be served on the home office of your insurance company if you are dealing with an insurance broker as opposed to an agent of a particular company because notice given to an insurance broker is generally not considered to be notice to the insurance company. If you have specific questions regarding your policy, you should direct them to your insurance agent or broker, and any explanation should, if possible, be put in writing.

Should you have any questions regarding your homeowners insurance or your closing documentation generally, please contact William Terpinas Jr. at wterpinas@lavellelaw.com.