Lender-placed insurance, often referred to as force-placed insurance, varies in cost depending on various factors including the insurer, the property’s location, the amount of coverage required, and the borrower’s personal insurance history. Lender-placed insurance is typically more expensive than standard homeowners insurance because it is purchased by the lender to protect its interest in the property, without the usual competitive bidding process. The insurer primarily considers the property’s replacement value and not its market value, to determine the cost. As such, the annual premium could range from a few hundred to several thousand dollars. It’s crucial for homeowners to maintain their own adequate home insurance to avoid incurring these higher costs associated with lender-placed insurance.
What is the cost of lender-placed insurance?
