Insurance

1

What Insurance Do You Need for Your Mortgage?

How Much Insurance Coverage Do You Need?

You must maintain insurance coverage equal to the lower of:
♦ The replacement cost of your home, or
♦ The remaining principal balance on your loan.

Example:
If your unpaid principal balance (UPB) is $80,000 and the replacement cost is $120,000, you need at least $80,000 in coverage.

Note: Some states may have exceptions. Please confirm details with your insurance carrier.

Types of Homeowners Insurance

Below are common types of coverage and general guidelines:

Important: This is only an overview. Always consult your insurance carrier to confirm your exact requirements.

Homeowners (Hazard) Insurance

♦ Required for all mortgages to protect your home and investment.
♦ Can be paid through your escrow account.

Flood Insurance
♦ Required if your property is in a special flood hazard area.
♦ Determined by FEMA based on historical flood data.
♦ Can be paid through your escrow account.
♦ Coverage must be at least the lowest of:
   ◊ The full replacement cost of the dwelling and improvements
   ◊ The unpaid principal balance of the loan
   ◊ The NFIP maximum limit of $250,000

Windstorm/Hurricane Insurance

♦ Required in high-risk states such as those along the Gulf Coast or in Hawaii.
♦ Separate from your homeowners (hazard) policy.
♦ If required, it can be paid through your escrow account.

Homeowners Association (HOA) Insurance

♦ May be required if you live in a condo or townhome.
♦ Managed by your property association and included in HOA dues.
♦ Not paid through your escrow account.

Mine Subsidence Insurance
♦ May be required in areas with high risk of ground movement due to former underground mines.
♦ Not paid through your escrow account.

Earthquake Insurance
♦ May be required in earthquake-prone areas, such as California.
♦ Not paid through your escrow account.

2

Insurance Claim Checks and Loss Draft Funds: What You Need to Know

What Happens When You File an Insurance Claim?

If a disaster damages your home, your insurance company may issue an insurance claim check, also called loss draft funds.

♦ These funds are intended exclusively for property repairs.
♦ They should not be used for other costs, such as attorney fees or public adjuster charges.

If the Insurance Claim Check Is Sent to Us
♦ We may endorse the check and return it to you so you can complete the repairs, depending on:
◊ Your loan status, and
◊ The amount of the insurance funds.
♦ If the total claim exceeds $40,000 or your account is delinquent, we may deposit the funds and release them in increments as repairs are completed.

If You Receive the Insurance Claim Check
♦ Endorse the check and send it to us at lossdraft@admortgage.com.

Important: Contact us by email or phone before sending the check, as we will provide the necessary documents for endorsement or deposit.

3

Updating Your Insurance Information: What You Need to Do

Reporting Insurance Policy Changes

If there are any changes to your insurance policy or carrier, please notify us as soon as possible by sending the Declarations Page and Invoice.
Send via:

♦ Email: insurance@admortgage.com
♦ Mail:
899 W Cypress Creek Rd
Fort Lauderdale, FL 33309

Be sure to include:
♦ Your loan number
♦ Your most up-to-date contact information

Why This Matters:
Keeping us informed ensures your escrow account stays accurate and we can apply funds correctly on your behalf.
If you have questions about insurance changes, feel free to contact us.

Check Your Current Coverage
You can review your current insurance detailS anytime at the ADHome Portal:
https://adhome.admortgage.com/login

Required Mortgagee Clause
Your insurance policy must include the following Mortgagee Clause:
A&D Mortgage LLC
ISAOA/ATIMA
899 W Cypress Creek Rd
Fort Lauderdale, FL 33309

If it’s missing, contact your insurance company immediately to update it.