Different types of insurance for homeowners

There are different types of insurances that cover real estate and home owners.  There are a variety of types offered and different terms, but contact your insurance professional for assistance if you have additional questions.

Title Insurance: It is usually split into two policies, such as an Owner’s Policy and a Lender’s Policy. Both basically insure the same thing, that the owner of record is the rightful owner and that the liens of record (e.g., mortgage) are the ones that everyone has agreed to. The title company searches the public records and certifies the title and the liens. Often, they clear prior liens and handle the transfer of ownership from seller to buyer with the County Clerk. Additionally, they provide information about real estate taxes, judgment and bankruptcy searches, and Certificates of Occupancy and Building Permits.

Life and Disability Insurances: This is something to consider when you own a home. What if the worst case scenario happens? Depending on your age and health, the cost can be worth it. There are many types of life insurance (term vs. universal life insurance, for example) that can accomplish different goals from paying off your mortgage to planning for retirement. A strong life insurance professional is as important as a strong accountant. Cheapest is rarely best. Financially, many are covered in case of death but get crushed at times of disability. Investigate the cost….it usually makes good sense.

Homeowner’s Insurance: It covers the replacement cost of the home and is required by lenders to ensure that their collateral (the home) will be replaced in case of damage. The amount of the policy need not include the value of the land. There are variables in cost by company and by the amount of the deductible.  Many people include riders to their homeowner’s policy for personal property (like jewelry) or get discounts because they tie it to their auto policies, etc. Recognize also that policies vary for owner occupied homes to second homes to vacation homes to investment properties.

Flood Insurance: This is typically mandated by the Federal Government if your property is located in a Flood Zone. Flood Insurance Premiums are used to assist FEMA in rebuilding areas affected by flooding (like from a hurricane). Traditionally, “acts of God” have been excluded from many insurance policies. That was what forced the Flood Maps and mandatory coverage’s. (I imagine there is Tornado and Earthquake Insurance Policies as well, in areas where they are more likely.)

Make sure you get the recommendation of a professional though and check into the differing costs associated with each before making a decision in protecting your assets and your family.

%d bloggers like this: