During almost any home sale, there are three types of insurance that you need to be aware of.
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When buying a home, there are three types of insurance you should be aware of:- Title insurance: Normally this is mandatory if you’re paying a mortgage, but if you pay cash, you have the option to skip it. Even as a cash buyer, I don’t recommend skipping out. Title insurance insures that both the owner’s and the lender’s interests in the home are protected against things like title defects or liens. Title insurance is especially important in short sales and foreclosures which often carry a higher risk of things like tax liens. You want to make sure the title is clear and that no one can claim your property or file a lawsuit against it down the road.
- Homeowners insurance: Like title insurance, it’s not required if you own your home outright, but it’s required if you carry a mortgage, and I feel like it’s necessary either way. It covers you from a variety of things like fires and storms, and you want it even if you’re not legally required to have it.
- Extra moving insurance: Bare bones, federally mandated moving companies are required to offer insurance of $0.60 per pound of items, which is known as a release coverage protection. If something breaks during a moving, you won’t get back the full amount you paid for it. There is also full value protection that you can purchase from the moving company, which we always recommend. This covers you for fair market value of what you’ve paid for your items. Check with the moving company, though, because rates change by company. If you move very expensive items, you can get extra third-party insurance that usually costs around $100 per $10,000 of coverage. Check with your mover to see if they have extra coverage options.
