Home insurance can be such a boring topic, and a lot of people tend to go through life without knowing anything about it. Then disaster strikes, and only then do they figure out the actual importance of insurance. The whole idea of real estate insurance is to protect homeowners from huge losses in case of any misfortune. Insurance spares disaster-stricken families from most of the grief and hopelessness that a tragedy brings. It can be a real life-saver.
However, most people are caught not knowing even the type of coverage their home has. Here are a few types of house insurance you might need to brush up on.
Title insurance protects innocent buyers from the event that the property deed is found to be void or false. This type of insurance is most commonly purchased with a one-time fee at the closing of the sale. The coverage can include “lenders” policies, where buyers are protected up to the property’s mortgage value. On the other hand, “owners” coverage protects up to the property’s complete purchase price. Compared to “lenders” policies, “owners” coverage offers much more protection since it covers both the value of the down payment and the mortgage amount.
Homeowner’s Insurance is a comprehensive insurance offering fire, theft and liability coverage. Lenders frequently make homeowner’s policies mandatory. A lot of valuable property can be covered by this type of insurance. Wedding rings and jewellery, as well as furniture and equipment can be protected under this policy.
Flood Insurance is mandatory for areas prone to flooding. The federal government issues this insurance for those homes in high-risk locales, such as those near a river or bodies of water. Flood insurance can provide you with as much as $250, 000 in coverage for a single family home. Belongings can be insured for up to $100, 000. Consult insurance agents to check whether your area is high-risk.
Home warranties are usually most relevant for buyers of new homes. This type of insurance assures buyers that they will be indemnified in case their new house needs repairs. Buyers will then be protected in the event builders refuse to fix the problem or the company goes out of business.
If the home warranty is bought by the house builders from a third party, the policy covers specific types of protection. The first year usually covers workmanship and in the first two years mechanical problems such as plumbing and wiring are included. They also offer protection against structural defects for up to a decade.
For existing homes, sellers usually buy home warranties, which frequently refer to one-year service agreements. In case a hidden defect or major flaw unexpectedly surfaces, the warranty firm shoulders the cost for the repairs.
Inevitably, real estate insurance, policies and warranties have their own limitations. These different types have varying degrees of coverage, and differ as to the deductibles and costs. Make sure that you consult trusted insurance agents and home builders prior to the closing of any sale of property.