HAZARD INSURANCE

Lenders normally require borrowers to insure their homes, usually to at least the value of the loan, against loss or damage to the home, such as fire, wind or storm damage. Both the borrower and the lender are insured under the policy. Most loans are “escrow” loans (please see the definition of “escrow account” for more information), which means that the borrower pays into an account held by the lender enough money each month to for the lender to pay the hazard insurance premiums as they come due.


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