Home Insurance

Insurance is a contract between the insured and an insurance company that protects against the risk of large and calamitous loss.

The importance of home insurance cannot be undermined. There are two primary reasons why home owners buy home insurance. Firstly, a home is the most important asset belonging to a home owner, and the need to protect it is imperative. Secondly, mortgage lenders require home owners to own insurance to protect the lender’s investment form damage or loss.

The major risks covered by home owner’s insurance are:

Damage or loss to the home and other structures included on the property

Damage or loss to personal property items in the home

Injury or harm to third parties who come to your home

The home insurance covers the person insured and the members of his home. Third parties who come to your home are also covered through the liability portion of the insurance policy for injuries. Additionally, you and your family members also have some liability protection to others even while you were away from your home.

There are two distinct types of insurance under home insurance – Title insurance and Homeowner’s insurance. They protect against totally different types of risks.

Homeowner’s insurance covers loss or damage to the home, structures on the property, personal contents of the home, as well as third-party liability.

Title insurance, on the other hand protects ownership interests in the real property. Title insurance is purchased to guarantee that the home owner has a good and marketable title to the property. When purchasing a home by means of a loan, lenders require you to obtain title insurance. That way they know that you have clear ownership of the real property and the home.

The title insurance company conducts a search to find out what liens, encumbrances and defects are present to the title as it stands in the hands of the seller before you can obtain the loan. Once the title insurance coverage is obtained, the Title Company guarantees that the buyer has marketable title to the property after the purchase. Any liens, encumbrances and other defects to the title that occur during your ownership of the property, however, are not covered by this insurance

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