Why Immigrant (legal or not) needs Home Insurance. Learn about the benefits…

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Can Illegal Immigrants Buy Houses in the U.S.

While there are legal and financial obstacles to overcome, undocumented immigrants can, in fact, buy a house in the United States. According to the Migration Policy Institute, in 2014 there were more than 3.4 million undocumented immigrants who owned homes. That’s 31 percent, or nearly a third, of the US undocumented population.

They pay taxes on these homes as well. Despite rhetoric about undocumented immigrants taking benefits but not paying taxes, the data shows that this is simply not the case. The Institute on Taxation and Economic policy analyzed the above-mentioned data on undocumented property ownership and estimated that undocumented immigrants had contributed as much as $3.6 billion in property taxes alone.

How is it Possible for Undocumented Immigrants to Buy Houses?

There is no law that says non-US residents cannot own property in the United States. In fact, foreign investors or businessmen and women frequently own homes or property in the US, just as their US equivalents can also own property in other countries.

Purchasing a home in any country require significant resources, though–resources that undocumented immigrants usually don’t have access too, but that doesn’t mean illegal immigrants can’t own property in the U.S.

While some undocumented immigrants might be able to simply purchase a home with cash, most use a little-known investment tool known as an ITIN mortgage. An ITIN is an individual tax identification number and was created as an alternative to a Social Security Number so that foreign nationals who owned businesses or property in the US could pay taxes on those assets.  But undocumented immigrants can also acquire an ITIN and are then able to open bank accounts, pay income tax—and qualify for a mortgage on a home.

Below, we’ll detail the typical process for an undocumented immigrant to qualify for a mortgage and start on the path toward homeownership. There are legal and financial obstacles to overcome but home ownership for undocumented workers is certainly a real possibility.

Types of Homeowners Insurance We Cover*

HO-1: Basic

A basic form homeowners policy is just that — basic. It will usually financially safeguard against 10 named perils: fire or smoke, explosions, lightning, hail and windstorms, Theft, vandalism, damage from vehicles, damage from aircraft, riots and civil commotion, volcanic eruption.

You can sometimes get coverage for the belongings inside your home in addition to the structure itself, but the items you want coverage for generally must be specified at the time you purchase your policy.

Floods and earthquakes aren’t typically covered, and neither is your personal liability if you’re sued by someone who gets injured on your property.

HO-1 policies aren’t offered much anymore due to the affordability of other types of coverage that tend to offer more bang for their buck. Plus, mortgage companies don’t always consider this type of policy sufficient coverage for a home.

HO-2: Broad Form

A broad form policy is a more common type of homeowners coverage.

It covers all the perils in an HO-1 policy, plus: falling objects, weight of ice, snow, or sleet, freezing of household systems like AC or heating, sudden and accidental tearing apart, cracking, burning, or bulging of pipes and other household systems, accidental discharge or overflow of water or steam, or sudden and accidental damage from artificially generated electrical current.

The HO-2 typically covers not only your home’s structure but your belongings and sometimes even your personal liability as well. It’s important to note, though, that because the HO-2 is a “named peril” policy, any damage caused by events other than those listed on your policy will generally be excluded from coverage.

HO-3: Special Form

The HO-3, or “special form,” policy is the most common type of homeowners insurance, namely because of its broad range of coverage and general affordability. It covers all the perils mentioned in the HO-2, or “broad form,” policy — but it also goes further than that.

Because an HO-3 doesn’t limit coverage only to named perils, it often can provide more financial protection than an HO-2.

That means that your typical HO-3 form can financially protect you against any and all perils unless your policy specifically mentions them in the exclusions — and if it doesn’t, you’re covered.

The HO-3 policy typically insures your home and attached structures (like a garage or deck), as well as your belongings and your personal liability if you accidentally injure someone or damage their property.

What you are and aren’t covered for will depend on your specific policy, so it’s always wise to go over everything with your insurer. Earthquakes and floods are generally excluded from coverage on most HO-3 policies.

HO-3 versus HOB

During your homeowner’s insurance search, you may have come across something called a HOB policy. Nearly identical to the HO-3, a HOB form typically provides more coverage against water damage for coastal areas of the U.S.

A HOB policy may also cover things like garden tractors, boat and boat trailers, lawn mowers, and other similar accessories while they’re on your property.

HO-4: Tenant’s Form

This policy type is specifically for renters since it covers only belongings and personal liability — not the building structure, which the landlord buys insurance for.

Belongings are typically covered against the same perils as an HO-2 broad form homeowners insurance policy.

An HO-4 policy, more commonly known as renters insurance, will also usually cover additional living expenses should you need to stay elsewhere temporarily while your apartment is getting fixed up.

 

house-with-windows-and sky

HO-6: Condo Form

This type of policy is designed specifically for condo owners and financially protects belongings and personal liability.

An HO-6 policy, also known as condo insurance, also typically extends to the walls, floors, and ceiling of the unit too.

The same incidents covered under a typical homeowners insurance policy generally apply to HO-6 coverage too.

The rest of the condo’s structure is usually covered by a policy purchased by the homeowner’s association.

HO-7: Mobile Home Form

The mobile home form is essentially the same as an HO-3, but is designed specifically for mobile or manufactured homes, which don’t fall under regular homeowners insurance coverage.

HO-8: Older Home Form

An HO-8 policy is designed to address specific concerns with coverage for older homes.

The coverage details of an HO-8 are basically the same as an HO-3, but with special adaptations to better suit older homes, which may have different coverage needs than newer houses.

Historic homes and registered landmarks usually carry this type of policy.

*information credit to esurance

The three most common types of US home insurance:

Homeowner insurance

Rental insurance

Flood insurance

The items usually covered by home insurance are:

Dwelling Fire: Buildings, including the house itself, fences, garages, driveways, swimming pools, personal belongings, personal property:

furniture, electrical appliances, books, collections, documents, etc., there are particularly valuable things that need to be repaired before the insurance Loss of Use:

Personal Liability Insurance due to disasters that make the house uninhabitable or usable. Personal liability insurance has been incurred during the repair period.

Due to the negligence of the insured, the outsider is injured, the property is lost, and the lawyer’s expenses, such as someone slipping.

Falling on the floor of your home is therefore injured(except, depending on the city where the house is located, you should consider whether to buy Flood Insurance)

Homeowner Insurance Example

homeowner-insurance-example

How to buy home and renters insurance

Generally speaking, American housing insurance generally refers to the insurance that buys purchase for their houses.

This is the most basic type of insurance. In fact, renting a house in the U.S. also requires “tenant insurance” to protect their property.

Housing insurance can generally be divided into three categories: homeowner insurance, household insurance, and earthquake/disaster insurance.

Coverage of general housing insurance

1. Coverage A – Dwelling Coverage: Housing main insurance, which guarantees the structure of the house.

Mortgage companies generally require homeowners to purchase a certain amount of Dwelling Coverage. If it is a condo, it does not include exterior walls and public areas.

2. Coverage B – Other Structure on Your Property: This part of the insurance coverage is generally 10% of the main insurance.

Outside the main body of the house, such as a separate garage or a separate tool room.

3. Coverage C- Personal Property/Contents: This part of the insurance is to protect the damage caused by the insurer’s personal damage caused by disasters, theft, etc.

If there is no expensive furniture in the house, it is enough to buy 30,000 US dollars.

4. Coverage D- Loss of Use: When the insurer has to pay for expenses related to accommodation, food, etc. due to damage to the house, the insurance company shall bear the responsibility.

A lot of insurance you buy has a minimum amount, such as 10,000 US dollars, if you want more, you have to add money, the upper limit is generally 20% of the main insurance.

5. Coverage E- Personal Liability Insurance: The cost of legal disputes arising from the damage caused by the house during the residency period and the indictment.

For example, someone slips on your steps or falls off the stairs. After they are injured, you are sued, and it is your responsibility.

The insurance company will pay this compensation. This kind of purchase of hundreds of thousands of dollars of coverage, about 10 dollars a year, compared to this kind of thing happens very rarely.

6. Coverage F – Medical Payment coverage:

The medical expenses of the injured person from the coverage of the injured person’s medical expenses insurance company during the period of residence, but also the minimum amount, such as 1,000 US dollars.

There are also some options that need to be studied carefully. For example, water backup and sum overflow only protect the house loss caused by the return of the sewer, not the loss caused by the rupture of the downpipe.

Another insurance term is Perils, which refers to the additional risk coverage included in the fire or consequential loss insurance.

It protects the insured from explosions, riots and strikes, vandalism, aircraft, cars, and damage to water pipes. Burst or “natural disasters” such as damage caused by wind, flood an, earthquake.

What type of insurance is purchased?

1. Single Family House – need to purchase HO-3 policy.

2. Town House needs to purchase a HO-3 policy. Some banks also require Master Insurance. Master insurance information is available from the Homeowners Association.

3. Condo: Under normal circumstances, the loan bank requires HO-6 policy (the loan bank requires Coverage to be at least 20% of the Appraisal value of the house evaluation price) and Master Insurance.

MasterInsurance is available from the Condominium Association. If Condo’s Master Insurance includes in-house insurance in addition to the public area, you do not need to purchase the HO-6 policy separately.

Bank Statement Mortgage Loans

How much is the Dwelling Coverage suitable for purchase?

1. HO-3 policy: There is a column in the Cost Approach of the Appraisal Report called Total Estimate of Cost-New, which is estimated how much it costs to rebuild the house.

The amount of insurance required by the lending bank is the lower of the loan amount and Total Estimate of Cost-New, and we recommend purchasing it under Total Estimate of Cost-New.

Some insurance companies also offer 120%, 125%, 150%, even GuaranteedCost Coverage or 20%, 25%, 50% Extended Dwelling Coverage, etc. This Replacement Cost and Cost to rebuild New mean.

For example, in the case of 150% Replacement Cost Coverage, the actual maximum amount of Dwelling Coverage you purchase for $200,000 is $300,000, which can save you some insurance premiums.

2. HO-6 policy: The loan bank requires the Dwelling Coverage to be at least 20% of the Appraisal Value.

3. Regardless of the type of insurance, the Deductible amount must not exceed 5% of the Dwelling Coverage.

How to Buy Cheap Home Insurance

1. Increase the self-paid Deductible, which can reduce the housing insurance premium.
2. reduce the amount of insurance,
3. the housing insurance car insurance
4. the old customers ask the insurance company whether there are discounts, such as customers for more than five years.
5, improve the safety of the house, such as the installation of Smoke Detector (Smoke Detector) or burglar alarm (Alarm), there may be a discount.

Investment Housing, Self-Occupation? The Differences in Housing Insurance

1. Investment housing insurance focuses differently
Because the homeowner does not live by himself, the owner’s own items are few, so Coverage C – Personal Content will become very small, and Coverage D-

Loss of Use will also become Loss of rent. In order to compensate tenants for housing damage, they have to pay for accommodation, food, and other related expenses, generally up to 24 months of rent.

In addition, Coverage E and Coverage F will also improve, because tenants usually do not take care of the house like the homeowner, so the chance of injury is greater.

2. The insurance for self-occupied houses is usually cheaper than the investment house, but remember not to use this as reason to saves money.

In the event of an accident, the insurance company is likely to refuse compensation.

3. If the house is converted from self-use to investment, it must be changed to the insurance company, otherwise, the insurance company may refuse to compensate when the accident occurs.

4. Other issues needing attention:
1) If there is an Escrow Account, the HO-3 policy will be collected by the loan bank on a monthly basis and deposited into the Escrow Account, and then paid annually to the insurance company by the loan bank.

The HO-6 policy is generally not subject to Escrow and requires the borrower to pay for it.

2) Depending on the location of the house, some need to provide additional earthquake insurance (Earthquake), flood insurance (Flood) insurance, etc. to the loan bank.

For example, the loan bank will determine whether the house is in FloodZone based on Flood Cert to determine if it needs Flood Insurance.

front-view-house

How to claim? Timely, detailed, and evidence

1. The owner must declare within 60 days after the loss of the house, and fill in the “certificate of loss” to the insurance company.

2. All property losses must be discounted (except for the purchase of replacement cost insurance).

3. If the insurance company has a bad business style and does not make claims according to the regulations and contract regulations, the insured should record the reasons for the whole incident and save a copy of the letter communicated with the insurance company in order to find a lawyer to sue the insurance company.

US home insurance claim time limit

The time limit for housing insurance claims is as follows:
1. Send the “Certificate of Loss” to the insurance company within 60 days of the incident;

2. Select the assessor within 20 days after the insurance company issues the valuation notice;

3. If the insurance company The claim has no objection and must be filed within 12 months after the loss occurs.

4. If the vacant building has not been insured for 60 days at the time of the loss, the insurance company will not pay the claim.

Why do tenants want to buy tenant insurance?

The landlord’s housing insurance cannot protect the tenant’s property, and its protection is limited to the owner’s own house.

In other words, if the tenant’s things in the rental house are stolen, the landlord is irresponsible. When a tenant purchases tenant insurance, they can enjoy the loss of property caused by theft of their own items or human or natural disasters.

Generally, if you only buy the minimum amount and buy it with auto insurance, the general tenant insurance is about $10 per month.

If you are unfortunate, you need a home insurance claim:

If there is any criminal activity, please call 911 and the police for the first time.

Call your insurance agent as soon as possible to declare your insurance claim

In order not to cause more disasters, if you need to find professional maintenance personnel immediately

List the list of lost items and receipts, and return them to the insurance company handler or your insurance agent.

To find out the scope of your home insurance, please refer to the following form:

homeowner-insurance-form

Before you buy home insurance, you need to prepare the information:

Housing address and purpose

House details

Homeowner information

Whether there are pets (if any, pets have a bite record)

Special term introduction – umbrella insurance

Umbrella Insurance is also known as Excess Insurance.

Umbrella liability insurance, also called extra liability insurance, is the insurance liability for the catastrophe. In order for this insurance to be effective, the insured must first purchase underlying liability insurance.

In the event of a loss, the basic liability insurance is first responsible for compensation until its maximum limit and then the umbrella liability insurance is responsible for the compensation for the loss balance until its maximum limit.

 

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