Home Insurance Essentials for First-time Buyers
As a first-time home buyer, you are likely to encounter numerous offers for home insurance. And not just one type, but different kinds! If only we could purchase all to safeguard our largest investment... or should we?
There are home insurance types that are downright necessary; some are good to have but aren't a priority to buy; and some are just useless investments that are best ignored. To make things easier for you, Cain Realty Group brings you a list of home insurance essentials that you should focus on when buying insurance for your home. Be smart with your investment, and smart with your money!
~Home Insurance Must-Haves~
1. Title Insurance - a mandatory requirement when you're getting a mortgage, title insurance ensures that both the lender and the owner will not be financially compromised by any title defects, liens, or other concerns that may come up with the title. This is especially important when transacting for short sales or foreclosures, as these transactions commonly carry a higher risk of having a tax lien.
Title insurance will safeguard you against needing to pay for liens and ensure your ownership of the property by preventing future claimants and lawsuits.
2. Homeowners Insurance - buyers acquiring property through a mortgage are legally required to buy homeowners insurance. However, some cash buyers no longer feel the need to do so, as they will legally own the house after closing. Regardless of whether you buy through a mortgage or cash, this type of insurance is necessary as this protects your home from things such as storms and fires. Don't skimp on this one even if you are not legally required to have it.
3. Extra Moving Insurance - Federally-mandated moving covers only offer 60 cents/lb of an item-- insufficient to cover what most common house belongings are actually worth. While there is an option to purchase "full value protection", you need to specify which items are worth more than $100 per pound. Items worth more than $5,000 are not covered as well. Therefore, there is a need to have Extra Moving Insurance, especially if you are transporting valuables, to protect the value of your property as they are being moved from your old home to the new one. Third-party providers can have you covered for this with $100 per $10,000 of coverage.
4. Flood Insurance & Earthquake Insurance - There's no way of telling when an earthquake or a flood will strike the community where you live. Thanks to climate change, areas that are thought to be safe from floods can now easily be inundated. Same thing goes for earthquakes, as there is no means to predict when and where they will strike. Having flood insurance and earthquake insurance may be a luxury to some, but think of it this way; you may have it but not need it OR need it but not have it.
And that sums up our recommended insurance must-haves. If you want to read about insurance types that are best avoided, you can read about it in another post. If the budget is tight and it is difficult to acquire all at once, talk with your agent and seek advice on how to go about securing your largest investment.
For more tips on home insurance, be sure to check out our blog or access the original article from which this post was based by clicking here.