Like with many other major purchase types, it’s important to think about insurance when you’re buying a home. In fact, when it comes to mortgages and homebuying, there are several forms of insurance to think about.
At Altius Mortgage and our partners at Mortgage Ogden, we’re happy to explain all the ins and outs of the various insurance coverage formats that may be associated with your home loan, your home itself or related areas. In this two-part blog, we’ll first go over two coverage types that are meant specifically for borrowers and homeowners; in part two, we’ll dig into private mortgage insurance, which is a bit different.
Homeowner’s Insurance Coverage
For new homeowners, homeowner’s insurance is used to protect the home and any other structures present on the property you’ve purchased. It covers each of the following areas:
- Damage or loss to structures: Whether due to fire, major weather events or other forms of damage, homeowner’s insurance covers you in case your home or any other structure on the property is damaged or lost. Many insurance policies will even extend to covering damage based on burglary or vandalism, though it’s possible cheaper policies will not – be sure to check on this in advance before signing up.
- Loss of use: In cases where damage renders your home temporarily unlivable due to repair needs, homeowner’s insurance will offer cover some or all of the expenses associated with this, from the repairs themselves to a hotel stay.
- Personal property: In addition to your structures, homeowner’s insurance also covers personal items within the home. However, it’s vital to note that you have to have enough insurance to cover certain valuables – lower-value policies may not.
- Liability: If anyone is hurt on your property and attempts to sue you for damages, homeowner’s insurance also covers medical and legal expenses.
How Title Insurance Differs
Title insurance, on the other hand, is to protect your ownership of the new property you’ve purchased. Sadly, there are unscrupulous folks within the mortgage world who may attempt to scam you in a few ways, one of which involves obtaining the title to your property and then either selling it without your knowledge or trying to buy another property with your information.
Title insurance, however, protects you from these attempts. If you are indeed the victim of a scam, it will cover all your legal expenses and ensure your title remains in the proper hands. Along with ensuring your lender checks for liens on the property in advance of purchase, title insurance is the best way to confirm that all ownership areas will be robust and permanent.
For more on various insurance formats associated with mortgages and homebuying, or to learn about any of our mortgage rates or services, speak to the staff at Altius Mortgage today.