Like all valuable possessions in your life, you want to make sure your home is insured. There are different types of policies, each of which covers a different aspect of your purchase. Some are required, others are just a good idea.

Let’s take a look at the different fonts available…

1) Homeowner’s Insurance (Hazard Insurance)

Homeowners insurance provides coverage against fire, theft, and liability. Homeowners policies are required by lenders and often cover a surprising number of items, including things like wedding rings, furniture, and home office equipment. Talk to your insurance agent about what your policy will cover.

There are many factors that will determine the premium you will pay. The age of the home, square footage, number of claims on the property in the last five years, and proximity to a fire hydrant are just a few of the questions your insurance agent will ask you to determine the property’s insurability. .

Most agents use a cost estimator to calculate replacement cost estimates. This will ensure that your home is insured for the correct amount.

Typically, homeowners insurance can be included as part of your monthly mortgage payment. At closing, you will need to purchase the policy in advance to begin coverage immediately. Then, most lenders will “bond” a certain amount and make monthly insurance payments for you going forward.

2) Title Insurance

Purchased for a one-time fee at closing, title insurance protects the insured in the event that the title to the property is found to be invalid or defective. There are two types of policies: “Lenders” policies, which protect the lender up to the mortgaged value of the property, and “Homeowners” coverage, which protects homeowners up to the purchase price.

Mortgage lenders will require you to purchase a lender’s policy to protect your investment. Owner’s policy is not required, but it’s a good idea.

3) Flood insurance

Generally required in high-risk flood-prone areas, this insurance is issued by the federal government and provides coverage of up to $250,000 for a single-family home plus $100,000 for contents.

Your mortgage lender will request a Flood Certification to determine if flood insurance is needed.

Other types of insurance policies are available, depending on your location and specific needs. For example, certain hurricane-prone locations may also require wind and hail insurance.

When buying your home, talk to your insurance agent to make sure you have the right coverage!