Tips on Homeowners Insurance

Another cost of home ownership is insuring the home.  Home insurance is required by lenders.  If you do not have a mortgage, then you are not required to have it (although we still recommend it).    

In order to have actual insurance coverage, the name of the insured must match the name on title to the property. Make sure the names match. This is more of an issue with investors who use limited liability companies or holding companies to own the real estate.  

Homeowner’s insurance does not cover all possible damage to a house. The most common issue not covered is flooding caused by outside water. Most standard home insurance policies do not cover any flooding. If the house is in a flood plain, a lender may require flood insurance in addition to homeowner’s insurance.  

Having the cheapest homeowner policy is not the best option. There are very important coverages that owners often need to request in order to get them added. A policy may not cover earthquake damage or sewer backup damage unless there is a rider to the policy. These extra coverages can usually be added by the insurance company, but you often need to request them. 

Consult with your insurance agent to make sure your coverage is what you expect. It does not hurt to shop around for home insurance policies every couple of years to see if you can get the same coverage for a lower price.  

John C. Bennett is a real estate closing attorney and owner of Origin Title and Escrow, Inc.. Since 2003, Origin Title has handled real estate transactions – purchases, refinances, reverse mortgages – quickly and professionally. There will be no surprises, nothing misunderstood. Title searches are thorough and well-reasoned, to avoid unpleasant surprises later down the road. Calculate your closing costs in Georgia or Florida using our calculator or contact Origin Title using this form.