Insurance

Homeowners Insurance Information

Since your home is a major investment, it should definitely be insured.  If there is a mortgage on your home, the lender will require that it be insured.  There are several types of insurance.  How much insurance and what types of insurance you have will depend on a number of factors; the location of the home, home value, home construction, applicable laws, deductibles, costs, and etc.

There are five basic types of home insurance:

Homeowners:

This is the basic coverage that includes damage or loss from hazards plus added available coverage for personal property and liability, jewelry, theft away from home and other such items.  Factors affecting the cost of coverage are home value, age/condition, added coverages, location and deductibles.  Homeowners insurance may include wind and hail coverage, but in some areas a separate policy will be required.

Flood:

This indemnifies against loss by flood damage.  It is required by lenders in areas designated (federally) as potential flood areas.  The insurance is purchased through private companies, but is federally subsidized.

Wind and Hail:

In some locations damage from wind and hail is not covered in the basic Homeowners insurance, but insurers offer a separate policy for this coverage.

Earthquake:

Damages resulting from earthquakes are not covered by homeowners, flood or wind and hail insurances.  This insurance is quite inexpensive and should be considered if the property is in an area where earthquakes are a possibility.

Private Mortgage Insurance (PMI).

This is insurance coverage for non payment of mortgages and foreclosure.  While paid for by the homeowner, it only provides protection for the lender.  Lenders usually require PMI when the mortgage amount is greater than 80% of the home value.\There are many factors to consider when deciding what type(s) and how much insurance is needed or required on a given property.  Insurance carriers have a wide variety of insurances and costs available for buyers to consider.  When making decisions concerning insurance it is best to consult with a Buyer’s Agent, who is familiar with the area and the numerous insurance companies and policies available.