Homeowners Insurance 101

 Homeowners Insurance 101

The most common type of life insurance coverage is named individual life insurance. Named individual insurance covers the value of your home if you die, and is an important part of your financial plan if you are planning on living in your home. Many insurance companies provide loan protection policies as well, but you should consult with a reputable attorney before purchasing any type of insurance.

Title insurance helps mortgagees and property buyers prevent defects or problems with the title on a property, especially when a real estate transaction occurs. If a title conflict arises during a mortgage sale, the property insurance company will typically be responsible for paying certain legal damages, based on the policy type.

Sometimes a property or loan title policy also provides cover to protect the property and the lender if you die during the mortgage. Property insurance policies can also include a "rollover" clause. This means that the lender can continue to pay the mortgage interest, even if you pass away prior to the end of the loan term. Some lenders also allow their insured to sell their home without a mortgage, provided they make a specified payment each month until they have made the required payments.

If you have life insurance, you may not realize that you are covered by an insurance policy. Although it is possible to purchase a life policy online, you should talk to your attorney before making any commitments regarding life insurance. Because life insurance is usually required by law, you need to ensure that your policy will meet your needs.

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Property insurance is usually a "rolling" policy, which means that it continues to cover the home and its contents even if they are damaged beyond repair. You may also receive a deductible on the policy, which you pay out of pocket, before the insurance pays for repairs to the property. Property insurance is different from life insurance in that life insurance does not pay the expenses for lost income if you die. With a life insurance policy, a beneficiary is paid in case of death.

Always talk to your mortgage company about your options for homeowners insurance, particularly when selling your home. Your life and property insurance policy may need to be adjusted to match your mortgage company's policy.

Mortgage insurance companies may offer discounts to homeowners who take advantage of home insurance benefits, such as making regular mortgage payments, buying a replacement car, taking annual trips, or taking part in home renovation projects. These benefits can be combined into one affordable monthly payment if they fit your budget.

While life and property insurance are different from the other types of insurance you may already have, many people feel that they are similar enough that they make buying them the same. Purchasing a mortgage and life insurance policy from the same company also allow them to be easily differentiated.