Home Insurance

Buying real property? One of the first things you will be asked to decide is what kind of insurance you would like to buy. There are many, so here are some tips as to what could save you in years to come.

Title Insurance

First, never buy real property (house, land etc.) without title insurance. There are many people who believe that title insurance is a waste of money. However, it has saved many people thousands of dollars over the years. When you order a title insurance policy a title search will be done beginning at least 40 years in the past. A title examiner will then determine through a chain of title if all parties have deeded the property correctly in the past. The examiner will also look at easements, water ways, access, and any other encumbrances which may affect the property in the future. They will then prepare a title report which you should look at so you are aware of any potential problems. The title report will also show any outstanding loans or liens which need to be cleared prior to closing.

After closing you are then insured that you have clear title to the home. You will also be able to locate where easements run so you don’t plant grandma’s favorite rose bush in the wrong place. A title policy will not, however, show where your property’s boundary lines are. To have that marked you would need to do have a survey done.

Fire/Casualty Insurance

Insurance on your home is a requirement for any property which will be financed by a bank. Therefore, it seems logical that even if you are not financing the property it would be wise to have insurance anyway. For most people buying their home is a major life event. If you live in the home for 5 years and then it burns down it would be even more tragic if you had no insurance to help you rebuild.

There are many types of insurance for homes but the most important issue is that your house be covered for the full value of it and its contents. Also, it is wise to ask about an inflation clause to make sure that the value goes up as inflation goes up.

Other Insurances

If you are in a flood plane or near a body of water you may want to look into flood insurance. Most fire insurance does not cover water damage of any kind so if that is a concern you need to look into extra insurance. Most insurance also does not cover “acts of God” which include earthquakes, tornadoes, hurricanes, mudslides etc. There are different kinds of insurance you can look into if your home is in an area where those might be a problem.

There are so many things to think about when buying a house. If you do your insurance homework before the closing your headaches after will be minimized and you will be able to live in peace for many years to come.