Jim Valentine: The many types of insurance

Real estate transactions have a lot more insurance possibilities than the basic homeowner's policy.

Each is designed, of course, to protect the consumer, but are they worth it? That will depend on you and your particular circumstances and worry factor. Insurance is supposed to assuage your fears should something go wrong.

Your basic homeowner's insurance isn't all that simple any more. Are you insured to replace your residence? Are you insured if there is a wildland fire?

Last year the Nevada Legislature passed a bill allowing home insurance companies to exclude wildland fires from the coverage on your house if they choose to. For details you'll have to talk to your insurance company, but we suggest you look at your policy carefully just in case your policy was modified without informing you, or at least with you not seeing the message when they did inform you.

Wildland fire scares are making the insurance industry difficult to deal with in many circumstances in Northern Nevada. Whether it be they won't insure you, or extort a phenomenal amount of money for a premium, they are only assuring you that you won't lose everything in the event of a fire and that is at, in some instances, great cost. Maybe there are things you can do to get the premium down, i.e., add sprinklers, etc., but that will be between you and the insurance company you ultimately select to cover you.

There are also insurance policies for your lender. A FHA loan is an insured loan. A conventional loan where you pay mortgage insurance premium (MIP) is also an insured loan. You pay more because of a low down payment. The MIP helps offset the risk to the lender as it is an insurance policy on the loan. If you default, they get paid. Your source of relaxation? This enables you to buy with less cash down.

A home warranty is an insurance policy on the condition of your home. It covers the systems of the house, i.e., furnace, a/c, appliances, etc. There are assorted policies that offer different things so be sure to shop it carefully. The policies have gone up in price, like everything else, so look closely at what is covered. Beware, too, that there is a service call on most policies, something in the neighborhood of $85-$100. Don't make whimsical calls, be sure that you will be getting your value from your policy before you make a claim.

When you buy your home you most likely will buy title insurance. This can be a tricky one for the consumer as most people are unaware of what it is and what it covers. Most companies offer an extended policy for a few dollars more, i.e., $179 and it is well worth it. Some of the extended warranty policies' coverage is beyond comprehension it is so good. That is better than being shortchanged in the unlikely event you have the need to file a claim. Like most insurance policies, it's tough to pay it, but when you need it you will be very thankful.

Insurance companies are based on risk and numbers. They study the likelihood of events, and their potential for liability. They will charge you accordingly.

One would think that they would gladly pay the claim off if there is one as you paid them the fair rate that they charged you. Not so fast. They have floors of attorneys and will do what they can to stall you and deny/delay paying you what you are entitled to. The longer they delay the more they earn on their invested dollar. This is a generalization that doesn't apply to all companies, and sure doesn't apply to your insurance contact, salesperson. The idea here is to use reputable companies and don't experiment with insurance policies and companies.

Real estate insurance policies are not like a 3-year policy on a $27 disposable electronic device you buy. Pay attention to what is being offered and get the details on how it could affect you.

When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, License No BS-03481, RE/MAX Realty Affiliates 775-781-3704. [email protected].