Types Of Insurance For Home Buyers
As a first time homebuyer there are so many things to consider. One of them is the types of insurance for home buyers. With more than one type of insurance needed, it’s a good idea to brush up on what kinds of insurance you’ll be purchasing and what they cover. Below is some really good information I found for you from Realtor.com.
Homeowners’ Insurance
“Homeowner’s insurance provides fire, theft and liability coverage. Homeowners’ policies are required by lenders and often cover a surprising number of items, including in some cases such property as wedding rings, furniture and home office equipment.”
Check with your existing agent to see if they offer homeowners insurance, when you have more than one policy you can usually expect a discount.
Title insurance
“Purchased with a one-time fee at closing, title insurance protects owners in the event that title to the property is found to be invalid. Coverage includes “lenders” policies, which protect buyers up to the mortgage value of the property, and “owners” coverage, which protects owners up to the purchase price. In other words, “owners” coverage protects both the mortgage amount and the value of the down payment.”
You’ll get this policy at closing, it is usually paid for by the seller, but keep in mind that everything is negotiable. Also, if yours is a government loan like FHA or VA, there are specific guidelines on what is paid by whom.
Flood insurance
“Generally required in high-risk flood-prone areas, this insurance is issued by the federal government and provides as much as $250,000 in coverage for a single-family home plus $100,000 for contents.”
You will be expected to pay for this at closing so be sure to ask your title agent if the home you are purchasing is in a flood plane.
Home warranties
“With new homes, buyers want assurance that if something goes wrong after completion the builder will be there to make repairs. But what if the builder refuses to do the work or goes out of business? Home warranties bought from third parties by home builders are generally designed to provide several forms of protection: workmanship for the first year, mechanical problems such as plumbing and wiring for the first two years, and structural defects for up to 10 years. Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost.”
As a home buyer you can ask that the seller purchase a home warranty for you or you can purchase this yourself. Ask your real estate agent if they know of any programs for this type of insurance.
“Be sure to ask about limitations, costs, deductibles and “endorsements” (additional forms of coverage that may be available).”
Want more information? Check out these articles on First Time Home Buying.
Happy first time homebuying…
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Source: Realtor.com
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