Homeowner’s Insurance Vs Title Insurance for Homebuyers

When it comes to purchasing a home, there may be a few different types of insurance involved to protect both homeowners and mortgage lenders. Two of the most common and well-known here are homeowner’s insurance and title insurance — how do these differ, and why are they both important?

At Altius Mortgage and our partners with Mortgage Ogden, we’re proud to offer mortgage loan assistance to numerous clients, including first-time homebuyers who might not quite fully understand these different forms of insurance and why they matter. Here’s a primer on each of them so you have the proper information.

Homeowner’s Insurance

As its name suggests, homeowner’s insurance is used to protect your home in the event of damage or loss. This could be caused by a number of things, typically including:

• Damage or loss to home or structures: If your home is damaged in a fire, a storm, or even in an incident of vandalism, your homeowner’s insurance policy will help to cover the costs of repairing or rebuilding your home. Be sure you know what your policy covers, as not all policies are created equal!
• Damage or loss to personal belongings: Your possessions are also typically covered by homeowner’s insurance in the event of damage or loss.
• Loss of use: If damage to the home causes it to be uninhabitable, your policy may help to cover living expenses incurred while the home is being repaired or rebuilt.
• Liability: If anyone is hurt on your property, or if you cause damage to someone else’s property, your homeowner’s insurance policy may help to cover the costs.

Essentially, homeowner’s insurance is meant to help you rebuild your home and replace your belongings in the event of damage or loss.

Title Insurance

Title insurance, on the other hand, is used to protect the title of your home — and therefore your ownership of the home. This means that if someone tries to sue you claiming they have a better claim to your property than you do, title insurance will help to cover the costs of defending your title. It can also help to cover damages if someone does successfully sue you for ownership of your home.

Title insurance is not as well-known as homeowner’s insurance, but it’s just as important — especially if you’re buying a home. Make sure to talk to your mortgage lender about getting title insurance as part of your purchase.

Both homeowner’s insurance and title insurance are important when purchasing a home, and it’s important to understand the differences between them. Talk to your mortgage lender about what type of insurance is best for you.

For more on either of these forms of insurance, or to learn about our great mortgage rates and related services, speak to the staff at Altius Mortgage today.