ACORD 27 form. How to fill Evidence of property Insurance

ACORD 27 Form - Evidence of Property Insurance: Your Document Guide

The ACORD 27 form, known as the Evidence of Property Insurance, plays a crucial role in the insurance industry by providing proof of coverage. Mortgage lenders, property managers, and clients often require this form to verify that insurance is in place for a specific property.

Completing the ACORD 27 form accurately is essential to prevent transaction delays, like real estate closings, and to ensure all parties receive the necessary information regarding insurance coverage.

Whether you're an insurance agent, broker, or property owner, mastering the completion of the ACORD 27 form is vital. This guide offers tips to help you complete the form efficiently.

Why is the ACORD 27 Form Important?

• Proof of Insurance: The ACORD 27 form formally documents an insured property. It typically verifies real estate transactions, ensuring required insurance coverage protects the interests of all stakeholders.
• Standardized Format: The form consistently presents essential information about property insurance coverage. This format helps all parties involved understand the coverage without needing to review the entire insurance policy.
• Facilitates Transactions: Properly completed, the ACORD 27 form often becomes required for real estate closings, mortgage approvals, or lease agreements, making it a critical component.

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How to Fill Out the ACORD 27 Form

1. Date and Producer Information:
   • Action: Start by entering the date the form is being completed. Include the name, address, and contact details of the insurance producer (agent or broker) issuing the form.
   • Tip: Ensure the producer’s contact information is accurate and up-to-date to facilitate smooth communication with all parties involved.
2. Insured Information:
   • Action: Enter the name and mailing address of the insured, which is the individual or entity that owns the property being insured.
3. Tip: Double-check that the insurer avoids discrepancies, and make the name matches the property title or mortgage documents precisely to avoid disc Information:
   • Action: Provide the name of the insurance company providing the coverage. This section confirms which insurer underwrites the policy.
   • Tip: Include the NAIC (National Association of Insurance Commissioners) code if available, as this helps identify the insurance company accurately.
4. Lender’s Loss Payee:
   • Action: If the property is financed, list the mortgage lender or financial institution as the loss payee. This ensures that the lender’s interest in the property remains protected and that they receive compensation in case of a loss.
   • Tip: Verify the lender's correct name and address with mortgage documents to ensure an accurate listing on the form.
5. Policy Information:
   • Action: Provide detailed information about the insurance policy, including the policy number, effective date, and expiration date. Also, indicate the type of insurance (e.g., homeowners, commercial property) and the policy's coverage limits.
   • Tip: Double-check the policy number and dates, as errors can delay processing real estate transactions or claims.
6. Coverage Description:
   • Action: Describe the specific coverages provided by the insurance policy, such as dwelling coverage, personal property coverage, and any additional endorsements like flood or earthquake insurance.
   • Tip: Clearly outline all coverage types and limits to ensure that all parties, especially the lender, fully understand the extent of the insurance protection.
7. Deductibles:
   • Action: Indicate the deductibles for each type of coverage, which is the amount the insured must pay out-of-pocket before the insurance company pays a claim.
   • Tip: Clearly state the deductibles, as this information is crucial for the lender and the insured to understand their financial responsibilities in the event of a loss.
8. Special Conditions:
   • Action: Note any special conditions or clauses that apply to the policy, such as requirements for maintaining certain safety features or compliance with specific building codes.
   • Tip: Highlight any particular conditions affecting coverage or the lender’s interest in the property to avoid misunderstandings.
9. Signature and Date:
   • Action: An authorized insurance agency representative must sign and date the form. This signature certifies that the information provided is accurate and that the insurance coverage is active.
   • Tip: Ensure that an authorized individual, such as a licensed insurance agent, signs the form to validate the insurance evidence.

Additional Details to Consider While Filling Out the Form

• Verify Coverage: Before submitting the form, ensure all details align with the insurance policy, including coverage limits, effective dates, and endorsements. This step prevents issues during claims processing.
• Property Description: Provide a detailed description of the insured property, including its address and unique features. This is especially important for commercial properties or those with multiple buildings or units.
• Loss Payee Clause: Ensure that the loss payee clause meets the lender’s requirements. This clause is critical for protecting the lender’s interest in the property and ensuring they receive payment in case of a loss.
• Mortgagee Clause: If the property has multiple mortgages or lenders, list each lender with their respective mortgagee clauses. This ensures that all financial interests in the property are protected.
• Review Policy Limits: Confirm that the policy limits meet or exceed the lender’s requirements. Many lenders require specific minimum coverage amounts to approve a mortgage.
• Include Additional Insureds: If other parties, like property managers or business partners, need to be listed as additional insureds, include them on the form.
• Comply with State Regulations: Ensure the form complies with state-specific insurance regulations, which may dictate specific requirements for evidence of insurance.

Examples of Coverage Selections for the ACORD 27 Form

1. Dwelling Coverage:
   • Scenario: A homeowner’s policy includes $300,000 in dwelling coverage to protect the home's structure.
   • Tip: Verify that the dwelling coverage amount is sufficient to meet the lender’s requirements and cover the cost of rebuilding the home in case of a total loss.
2. Personal Property Coverage:
   • Scenario: The policy provides $100,000 in personal property coverage to protect the home's contents.
   • Tip: Ensure that personal property coverage is adequate to replace all belongings in the event of a loss, especially for high-value items.
3. Additional Endorsements:
   • Scenario: The homeowner adds an endorsement for flood insurance, with coverage limits of $250,000 for the dwelling and $100,000 for contents.
   • Tip: Include any additional endorsements that might be required by the lender or necessary based on the property’s location and risk factors.

Closing Comments

Accurately completing the ACORD 27 form is essential for providing precise and reliable evidence of property insurance. Fill out each section thoroughly to protect the interests of the insured, the lender, and any other parties involved. If you are still determining any form section, consult your insurance agent to ensure it is completed correctly.

Before submitting, double-check the form for accuracy and completeness to avoid transaction delays or coverage verification issues. By following the need for clarification, one can ensure that the ACORD 27 form effectively serves its purpose in real estate and insurance transactions.

Download the ACORD 27 Form

[Link to download the ACORD 27 Evidence of Property Insurance Form as a PDF]

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