Purchasing a new home is exciting! It may be the first time or the fifth time, but no matter how many times you have purchased or plan to purchase a home, you need to make sure you are protecting your investment.
Whether you purchase your home by cash or take out a loan, we highly recommend you get both homeowner’s insurance and title insurance. When you’re new to this process, they may sound like the same thing, but they are very different.
While we title specialists, not homeowner’s insurance pros, but we do know enough to share the basics. Here we explain how having title insurance when you close and homeowners to protect your property from unforeseen future accidents – are key.
Here’s how these types of insurances protect your home from different things:
What Is Homeowner’s Insurance?
Essentially, homeowner’s insurance protects your home from events that may happen. It is a policy that homeowners pay either monthly, quarterly, or annually. If you are purchasing your home through a loan, you are most likely required to have homeowner’s insurance.
Homeowner’s insurance helps to repair or replace your belongings or home if they are damaged or lost by certain covered perils. Examples of these may include:
- Damage to home or its contents
- Theft of personal property from within your home
- Payment of living expenses if your home is uninhabitable from certain perils
- Damage to your home caused by fire, hail, windstorms, and vandalism
- Structural damage to the home or any detached structures
- Personal liability for bodily injury/ accidents to guests in your home/on your property
You will need to check with your specific insurance policy, as some policies do not cover natural disasters. You may be able to add additional coverage to your standard policy for things like flood insurance.
What Is Title Insurance?
Title insurance protects you from things that have already happened but are unknown or hidden at the time of the property purchase. Title insurance will protect you from financial loss and any legal expenses if it is discovered there is a defect in your title.
When you purchase a home, an exhaustive title search is completed which reviews the history of your property and seeks to eliminate all title issues before the purchase is complete. But sometimes the past, through no fault of the title examiners, unearths past issues that can now complicate your property title. These issues such as filing errors, forgeries, and undisclosed heirs can be difficult to identify during the time of the search.
Homeowner’s insurance protects you from what may happen.
Title insurance protects you from things that have already happened but are unknown to you.
Title insurance, unlike homeowner’s insurance, is normally a one-time fee that is paid at closing and covers you throughout the lifetime of your home purchase.
Why You Need Both Types of Insurances
Both homeowner’s insurance and title insurance can have a significant financial impact on homeowners. Without the proper insurance coverage, homeowners can lose financially when having to pay out of pocket for their property and home damages to even losing their home over a title defect.
It does not matter if you purchase your home with cash or take out a home loan, you are able to (and should) get both insurance coverages.
Protect Your Property with True Concept Title
Make sure your home is protected from the past and the future with both homeowner’s insurance and title insurance. Whether you are looking to purchase a new home, or have questions about how title insurance, escrow, or you’re looking ahead and planning for mortgage payoff, contact True Concept Title today at 813-263-7168 and let our national title specialists work with you!