Thursday, June 16, 2022

Is Home Insurance And Building Insurance The Same

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What Is Mortgage Insurance

Is Home and Building Insurance The Same?

Mortgage insurance, also known as private mortgage insurance or PMI, is insurance that some lenders may require to protect their interests should you default on your loan. Mortgage insurance doesnt cover the home or protect you as the homebuyer. Instead, PMI protects the lender in case you are unable to make payments.

Hotel Or House Rental While Your Home Is Being Rebuilt Or Repaired

It’s unlikely, but if you do find yourself forced out of your home for a time, it will undoubtedly be the best coverage you ever purchased. This part of insurance coverage, known as additional living expenses, would reimburse you for the rent, hotel room, restaurant meals, and other incidental costs you incur while waiting for your home to become habitable again. Before you book a suite at the Ritz-Carlton and order caviar from room service, however, keep in mind that policies impose strict daily and total limits. Of course, you can expand those daily limits if you’re willing to pay more in coverage.

Dont Assume Anything About Your Insurance Policy

This sounds obvious, but its very difficult to put into practice. I meet people all the time who havent read their policies or even talked to their insurance agent to see exactly what their insurance policy covers and doesnt cover. While I cant make a blanket statement about how everyones insurance policy should look, I will say this: talk to your agent about your policy. Make sure you understand what youre paying for, what your deductible is, what is covered, and what is excluded. All policies from every insurance company have some exclusions, so make sure you know what those are.

Most people just look at the quote they get, or the summary of the policy when it finally arrives in the mail. But since they havent read all the pages in the policy itself, they might not know that there are some surprises in there. For example, some insurance companies dont like insuring hot tubs, or trampolines, or dogs. Your policy may have an exclusion for liability on these items, which may not be a problem, unless you have a hot tub, a trampoline or a dog. so make sure you check, and dont make assumptions.

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Two Types Of Title Insurance

The two main types of title insurance policies are an owners policy and a lenders policy. Homeowners need an owners policy, while the lenders policy protects your lender from any losses that could come up if the propertys mortgage is invalid. While the owners policy coverage is for the total purchase price, the lenders policy coverage is often for the mortgage amount.

You can buy title insurance for both residential and commercial properties, but make sure you read the policies carefully because the coverage varies between the two.

How Can I Protect My Home And Reduce My Insurance

8.13. THE HOME INSURANCE BUILDING  The Architecture Professor

Many losses are preventable. Consumers should ensure their homes are properly maintained. In addition to ensuring all smoke alarms and carbon monoxide detectors are working, consumer can consider:

Preventing Fire Damage

Woodstoves and Fireplaces: Inspect and clean chimneys and stove pipes regularly and at least twice a year. Make sure that you have proper floor protection. Keep combustible materials away from fireplaces and woodstoves.

Furnaces: Ensure that they are serviced annually by a licensed technician.

Wiring: If you have an older home, have a licensed electrician check the wiring as older systems may have difficulty handling the energy requirements of todays appliances. Also consider that dishwashers, kitchen stoves, dryers and washers should be professionally installed to prevent electrical fires.

Electrical outlets: Dont overload or overuse extension cords.

Space heaters, candles, and hurricane lanterns: Dont leave them unattended and keep combustible materials away.

Preventing Roof and Water Damage

Roofs: Check for excessive snow buildups. Clean snow to prevent ice dams and collapse from weight. Make sure that the roof is vented properly. Periodically check for loose shingles and repair them.

Plumbing: Periodically check the pipes and hoses throughout your home and repair as needed. This includes items such as the water hose for your clothes washer, exterior faucets, water heaters and sump pumps and drains.

Managing the Damages of Winter Freeze-ups

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Do I Need Homeowners Insurance

Homeowners insurance isn’t legally required at the state or federal level. However, if you have a mortgage, your mortgage lender will require you have home insurance coverage for financial protection for them and you in case something happens.

While homeowners or property insurance isn’t required legally, you may want it even if you own your home. Policyholders have financial protection, personal liability coverage and covered loss offered through home insurance. Those things add up to safety and security on your property. As the old saying goes, it’s better to have it and not need it than to need it and not have it.

Do I Need Buildings Insurance

Buildings insurance is often purchased by homeowners or those renting out a property that they own.

If you’re using a mortgage to buy your property, your lender will usually state that you need buildings insurance in place from the date of exchange in order to get the mortgage.

Even if you dont have a mortgage, it is advisable to take out a buildings insurance policy. Its important to bear in mind the cost of rebuilding your house if it were damaged or destroyed.

You wont need buildings insurance if youre renting a property as it will be up to your landlord to ensure they have a policy.

If you are a tenant and would like to insure your belongings, you may want to consider taking out a contents insurance policy.

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Do I Need Homeowners Insurance After My Mortgage Is Paid Off

You need homeowners property and liability insurance even after your mortgage is paid off if you want protection for your home. Homeowners property coverage can help protect against the potentially devastating costs to rebuild or replace your property after damaging events like fire, lightening and windstorms. Homeowners liability insurance can help protect you if a guest falls at your home and is injured.

Unlike PMI, homeowners insurance is unrelated to your mortgage except for the fact that mortgage lenders require it to protect their interest in the home.

While mortgage insurance protects the lender, homeowners insurance protects your home, the contents of your home and you as the homeowner. Once your mortgage is paid off, you have 100 percent equity in your home, so homeowners insurance may become even more crucial to your financial well-being.

Here are four reasons you need homeowners insurance after paying off your mortgage:

  • Homeowners insurance covers the structure of your home. Your homeowners insurance can help pay to repair or rebuild your home after a covered disaster or event such as a break-in, a lightning storm, a house fire, a tornado or a hurricane. Most policies also cover detached structures on the property, such as a storage shed, gazebo or guest house. If you don’t have homeowners insurance and your home is damaged or destroyed, you would be responsible for covering the costs to repair, replace and rebuild.
  • Make Sure You Know What Catastrophes Your Insurance Does Not Cover

    Buildings and home contents

    Did you know that its likely your insurance does not cover soil movement? We live in Colorado Springs which has expansive soils, and although builders are required to perform soil percolation tests and have inspections on the soil before laying a homes foundation, it still could be that a home has issues with soil movement years later. Erosion, and simple ground shifting, and, in some areas, the existence of old abandoned mine shafts can cause issues with homes moving and foundations cracking. Earthquakes are also generally not covered in a homeowners policy as well. Thats not much of a problem here in Colorado, but there have been earthquakes recorded as close to Colorado Springs as Florissant.

    Floods are generally not covered as well unless youve signed for insurance with FEMAs National Flood Insurance Program.

    Also, while fires are usually covered by a homeowners policy, check to see what is and isnt covered if your house burns down. It may be that your policy will cover rebuilding your home, but might not cover having the foundation removed, or having debris cleared, or having burned trees clear-cut. Make sure you dont have exclusions like this in your policy if theres any chance your home could catch on fire.

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    Do You Need Extra Buildings Insurance

    You might want to consider taking out extra buildings insurance to cover for you for other risks. You’ll have to pay higher premiums for this cover. You can add on extra insurance for:

    • flooding or subsidence if you live in a high risk area
    • accidental damage to your home
    • alternative accommodation if you have to move out of your home after you’ve made a claim
    • damage to boundary walls, fences, gates, driveways and swimming pools
    • damage to underground pipes, cables, gas and electricity supplies
    • glass in windows, doors, conservatories and skylights
    • liability cover if someone else’s property is also damaged
    • legal expenses cover

    What Should I Know About A Home Inspection

    Youre excited about your new home, but you might be equally as nervous about a home inspection. Here are some answers to frequently asked questions to help you understand what to expect.

    Why is an inspection required for my home?Where will the inspectors look?

    Roof: The inspector will walk along the roof to assess its condition.

    What happens with the information they collect?What happens after?How will I be notified about the inspection?Will the home inspector take precautions during the Covid-19 pandemic?Do I need to be present for the inspection?Will the inspector be wearing PPE and socially distancing when inspecting my property?

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    What Is A No Claim Bonus

    No claim bonus refers to a discount that is offered to policyholders for every non-claim year of a health or a motor insurance policy. With the NCB policyholders can either avail a higher sum insured amount for health insurance or a discount on their premium amount for motor insurance policies upon renewing their policy.

    No claim bonus refers to a discount that is offered to policyholders for every non-claim year of a health or a motor insurance policy. With the NCB policyholders can either avail a higher sum insured amount for health insurance or a discount on their premium amount for motor insurance policies upon renewing their policy.

    What Isn’t Covered By Homeowners Insurance

    Home Insurance Building

    While homeowner’s insurance covers most scenarios where a loss could occur, some events are typically excluded from policies, such as natural disasters or other “acts of God,” and acts of war.

    What if you live in a flood or hurricane area? Or an area with a history of earthquakes? You’ll want riders for these or an extra policy for earthquake insurance or flood insurance. Theres also sewer and drain backup coverage you can add on, and even identity recovery coverage that reimburses you for expenses related to being a victim of identity theft.

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    Typical Homeowner Insurance Forms

    An insurance form is another name for an insurance policy, and it sets forth your coverage and identifies which perils your home and belongings are insured against.

    The following are descriptions of the various insurance forms available for homeowners, renters, and condominium owners. Not all insurers use these exact terms or form numbers to describe their home insurance forms however the coverage will be similar.

    Homeowner Insurance: Most of the standard homeowners insurance forms offered are HO-2 and HO-3. The more perils your policy covers, the more you will pay for your policy. Most companies have their own variations of these forms, so check with the individual company.

    Mobile Home Insurance: There is a specific policy that is available for mobile homes since there are generally no attached structures. It is a package of insurance written specifically for mobile homes that includes coverage on the mobile home as well as theft and liability protection.

    Renters Insurance: If you rent an apartment or a house, you still have an exposure to personal liability coverage and are responsible for insuring against damages to your personal belongings. Personal liability coverage protects renters the same as it would if you were a homeowner. The owner of the building is responsible for insuring the building and for obtaining business liability insurance.

    What Will Landlord Insurance Protect You For That Home Insurance Won’t

    The tenant protection part of landlord insurance gives you additional protection against the following:

    • Theft and intentional damage by the tenant
    • Loss of rent when your place is damaged
    • Loss of rent if the tenant can’t pay
    • Your legal expenses if you have to evict a tenant
    • Replacement locks if you have to evict a tenant

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    Both Protect Property But In Different Ways

        Whether you rent or own your home, the propertyas well as its contentsshould be protected with insurance. For those who own homes, homeowners insurance can cover the home and its contents. If the home is a rental, the landlord would insure the property, while the renter would be responsible for insuring the contents of the home.

        Building A New Home Can Save You Tons Of Money On Your Homeowners Policy

        Home insurance for new construction homes

        One thing I am happy to share with people who are building a new home is that insurance companies love new homes! Most of my clients are shocked to find out how inexpensive their homeowners insurance policies are when they build a new home.

        For example, my agency offers enormous discounts for the first 12 years you own your home. It starts with the highest discount in the first year and the discounts decrease annually until the 12th year. So for at least 12 years, your rates are going to be lower than what they would be if you had bought a home built several years ago. In some cases, the first year can have discounts as high as 80% off! So its a win-win scenario: you have a brand new home you get excellent coverage and you save major bucks.

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        Benefits Of Health Insurance

        After assessing the various kinds of health insurance available, you must be wondering why availing such a plan is essential for you and your loved ones. Look at the reasons listed below to understand why.

        • Medical Cover The primary benefit of such insurance is that it offers financial coverage against medical expenditure.
        • Cashless Claim – If you seek treatment at one of the hospitals that have tie-ups with your insurance provider, you can avail cashless claim benefit. This feature ensures that all medical bills are directly settled between your insurer and hospital.
        • Tax Benefits – Those who pay health insurance premiums can enjoy income tax benefits. Under Section 80D of the Income Tax Act one can avail a tax benefit of up to Rs.1 Lakh on the premium payment of their health insurance policies.

        There may be additional advantages, depending on the insurance provider in question.

        How Much Buildings Insurance Cover Do You Need

        It’s important to make sure you insure yourself for the amount it would cost to completely rebuild your home. This is called the sum insured. The cost of rebuilding your home is not the same as the price you paid for your home, or its current value if you were to sell it. Rebuild costs are usually less than the current market value, so make sure you don’t over or under insure yourself.

        To help you work out the cost of rebuilding your home, there’s a Building Cost Information Service online calculator on the Association of British Insurers’ website.

        Some insurers offer unlimited cover so you don’t have to work out the rebuild costs. However, if already know what they are, it may be cheaper to shop around for a policy that fits your exact needs.

        Some policies work out the sum insured based on a general assessment of where you live and the type and age of your home. However, this may not fit your particular property, so you’ll need work out whether you’ve got enough cover.

        You should regularly review the amount your buildings insurance cover as rebuild costs tend to rise over time. Some insurers offer policies that will increase the sum insured automatically in line with rebuild costs.

        Remember, if you improve your home, such as adding an extension or a loft conversion, the rebuild costs may also increase and you will need to make sure you’re covered.

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        Renters Insurance Vs Landlord Insurance: Are They The Same

        Landlord insurance, also called rental property insurance, is not the same as either renters insurance or homeowners insurance. A home insurance policy does not cover the risks posed by renters, so a landlord policy is needed to cover dwelling damage, a limited amount of property damage and the legal liability exposure related to being a property owner.

        Since landlords own their dwellings, they not their tenants are responsible for unexpected damage to their building. But tenants are responsible for damage to their own belongings. Given this dynamic, landlords who regularly rent out their property must purchase a distinct landlord insurance policy.

        A landlord policy covers damage to the dwelling but will only cover personal property owned by the landlord that is used to service the apartment, such as a lawn mower or snowblower. Tenants should buy a renters insurance policy to cover their own possessions.

        Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

        Second Homes And Rental Properties


        A second home or a rental property will need insuring too. If you have a second home, youll need a separate policy in addition to home insurance for your main residence.

        Specialist landlord insurance is available if you receive a rental income on your second property.

        You may also need specialist insurance for your second home if the property is:

        • not your primary residence
        • left unoccupied for long periods of time usually more than 30 days
        • let out as a holiday home
        • used as a holiday home by friends and family.

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