Two Homeowners Insurance Policy Add-Ons To Consider
If you are purchasing a home for the first time, then you may be confused about homeowners insurance and the type of coverage that you need. A typical policy will cover damage to the home and the contents inside of it. It will also cover the garage and other structures on your property. It will provide money for living costs too, if you need to move out of your house while repairs are made. Liability is usually included in a policy as well, in case an individual injures themselves on your property and sues you. While a typical homeowners insurance policy will protect you from substantial costs under most circumstances, there are still some things that are not covered. To make sure this does not leave you in a dire situation as a first time home buyer, consider the insurance add-ons listed in this article.
When you purchase a home, the title or deed is transferred into your name. A typical home title will be transferred with no issues and you will be the new owner of the house. However, there are sometimes issues with a title that can leave you on the hook for certain responsibilities since the house will be in your name. For example, if there was a previous lien on the house that was never paid, then you may be responsible for the lien. A lien is a legal right to be paid from the proceeds of a home sale. If the lien is not satisfied when you purchase the home, then the lien holder may try to recoup money if and when you sell the home. Since the lien will be attached to the property and not a specific person, you will need to go to court to prove that the debt is not yours.
Other title issues may include a co-owner selling a property without the permission or signature of the other owner. The title transfer and sale of the home will be invalid in this situation. Sometimes, home renters will run a scam and act as the homeowners trying to sell the home. Since the renters will have no claims to the house, you will not own the home, even if you go through a traditional closing and title transfer.
These are just a few title and sale issues that may arise. If you purchase title insurance before you buy a home, then the policy will kick in and pay for legal fees that are incurred when you go to settle the home sale and title transfer dispute. While you may not end up with the home in the end, you will at least be protected from having to pay thousands of dollars in legal fees in the process.
Identity Theft Insurance
Identity theft is one of the fastest growing white collar crimes in America with over 15 million people affected each year. If you want to protect yourself from identity theft, then you can purchase a stand alone insurance policy for around $25 to $60 a year. A typical policy like this will require you to pay a deductible of up to about $500 before the coverage kicks in, and you will be reimbursed for costs up to $15,000. While this may be sufficient for some, legal costs can quickly exceed $15,000 to restore your identity and you may not be in a financial position to pay the legal fees or deductibles.
If you want the best protection, then consider purchasing identity theft insurance through your homeowners insurance company. Many insurance providers offer the protection as an add-on to a homeowners insurance policy. While policy fees are likely to remain consistent with the average cost of a stand alone policy, the homeowners policy is likely to cover more of your costs and deductibles will typically be waived or much cheaper.