If you’re going to make the sometimes-risky investment in real estate, you should make sure that you protect your purchase and your new property with the right type of insurance. The type of insurance that you’ll get depends on what your involvement is with the home (whether it’s your primary residence or a rental property) and whether you desire any additional or extended insurance.
Here are some of the basic types of real estate insurance to consider:
- Basic home owner’s insurance. This covers both the building and your property for basic damages caused by specific accidents and disasters.
- Extended home owner’s insurance. This adds certain types of coverage such as damage from electrical problems or from hurricanes.
- High risk insurance. Most plans don’t cover you in case of earthquakes or floods so you’ll have to purchase additional high premium insurance to get that coverage if you want it.
- Renter’s insurance. If you’re renting a home from someone, you’d want the property inside to be covered.
- Landlord’s insurance. This covers the building but not the property inside (since the property doesn’t belong to you as a landlord).
- Condo insurance. Condos have their own rules and their own types of coverage.
- Older home insurance. That’s right; older homes may have their own special insurance depending on their location and age.
- Title insurance. This is usually incorporated into the buying of the home. It’s insurance protecting your lender from any problems incurred with the title of your land. You’ll most likely have to pay this if you purchase a home.
- Builder’s insurance. You’ll want to look into this if you happen to be building your own home on a property you’ve purchased.
- Specific equipment insurance. You may want to get insurance for specific equipment in your home.
Insurance is designed to protect you and your property from financial detriment caused by unexpected damage to your home. You don’t want to go overboard and get excessive insurance that’s going to cost a fortune but you do want to make sure any real estate you purchase is properly covered.