You’ve purchased a home. Congratulations. You now need to protect this large purchase with insurance. Insurance amounts and needs will vary from home to home, area to area, and person to person. But here is a breakdown of the most common Home Insurance needs:
Title Insurance-Title insurance protects property buyers and mortgage lenders against defects or problems with a title when transferring property ownership. The party responsible for paying for the two policies-the buyer’s and the lender’s- varies from state to state and sometimes from county to county.
Homeowners Insurance– A standard homeowner’s insurance policy includes four essential types of coverage.
- Coverage for the structure of the home
- Coverage for personal belongings
- Liability protection
- Additional living expenses
Private Mortgage Insurance– Private Mortgage Insurance (PMI) if you put less than 20% down to buy your new home. PMI protects the mortgage lender if you stop making mortgage payments.
Flood Insurance-Flood insurance can be mandatory for homes in flood-prone areas. If your property is in an area designated by FEMA (Federal Emergency Management Agency) as an SFHA (Special Flood Hazard Area), you’re required to have flood insurance coverage.
An additional consideration that isn’t directly related to the home but might be vital for you to consider is Life Insurance. By having the safety net of Life Insurance, your loved ones don’t need to worry about payment of the mortgage without your income. Losing a loved one should not be followed by losing a home. Need to review your insurance needs? Scarlet Oak Financial Services can be reached at 800.871.1219 or contact us here.
Sources:
- http://blog.ditech.com/blog/what-type-of-insurance-do-i-need-when-buying-a-home
- https://www.iii.org/article/homeowners-insurance-basics
- http://insurancehomeowner.homeandfamily.online/how-to-make-sure-you-get-the-right-home-owners-insurance/?r=7088039234
- https://www.thelifegroup.org/why-life-insurance-matters-for-new-homeowners/
This material has been prepared for informational purposes.
