Hollywood House Fire
Mortgage Lenders require borrowers to carry fire insurance. I recommend upgrading your fire insurance to Homeowner’s insurance because there are many additional risks that fire insurance does not cover. Fire insurance covers loss due to fire and that’s it. The lender will not fund your loan until a Certificate of Insurance has been delivered to escrow. Besides, it’s a just good idea to insure your home.
A lot of buyers wonder why lenders require fire insurance, especially in Los Angeles where there are Earthquakes as well. This is for two reasons, one fire insurance is much less expensive than earthquake insurance, a typical annual premium for fire insurance may cost $800 per year where as earthquake insurance might be an additional $2,500-$3,000. The other reason is fire is the most common cause of property destruction.
How common are fires? More than 1,000 home fires are reported on an average day. That’s one every 85 seconds! Home fires kill seven people per day.
1 out of every 310 households reports a fire each year.