What Kinds of Insurance Do Homebuyers Need?
If you’re a prospective homebuyer, there are three types of insurance that you must have. Here they are.
Want to Buy a Home? Search All Homes
Want to Sell a Home? Get a Home Value Report
There are three types of insurance that every homebuyer should have, and I’m going to talk about them in detail today:
1. Title insurance. This is necessary when you’re buying a home with a loan. Your mortgage provider will require it. If you’re a cash buyer, you could skip it, but we don’t recommend doing so. It’s always important to carry title insurance, especially if you’re buying a short sale or foreclosure. To avoid any surprises in the future and a huge financial risk, you should always have title insurance.
2. Homeowners insurance. If you own the property outright, it’s not mandatory, but it’s also a huge risk not to carry it. Recently, I heard from another agent who shared that a client owned a home free and clear so they decided to not carry homeowners insurance. Soon after, a nearby fire impacted the home and the owner had to spend hundreds of thousands to rebuild. He wouldn’t have incurred this cost if he had homeowners insurance.
3. Extra moving insurance. Federally mandated moving coverage is 60 cents per pound of each item, and is also known as released value protection. If something breaks, you will not get the full cost of the item back. There’s also full-value protection—you will need to specify to the moving company which items are worth more than $100 per pound and if something happens, they will replace it or provide the full market value. This excludes items worth over $5,000. It costs a little more than the released value protection, but it’s worth it.
If you have any insurance questions for me or any other real estate-related questions, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.