Types of insurance to consider when buying a home

There are many expenses to consider when purchasing a home other than the price and the closing costs that are needed at settlement. Getting quotes on different types of insurance for your property is important before you purchase your home.

There are several types of insurance that may be needed for your home — property insurance, flood insurance and title insurance.

Property insurance is required by your lender if you are financing your home. If you are paying cash, it may not be required but is highly recommended. Your property insurance will cover the structure of your home and it contents. Items typically covered by property insurance include select weather-related conditions, damage caused by fire, smoke, wind, hail, the impact of snow and ice, lightning and more. Your home will also be protected against vandalism and theft.

It is best to shop around for property insurance rates, as they may vary depending on which company you use or if you have multiple policies with the same company. Things that may impact the cost of your insurance are the age and condition of the home, proximity to fi re hydrant or station, previous insurance claims filed on the property and your credit score.

The coverage of flood insurance is limited to situations in which the source of the flood was external to the house, such as a weather event. Flood insurance coverage is further segmented into two categories with one type protecting your personal property and other options protecting the structure of your home. It is vital that you check with your insurance agent to see if your home may be located in a flood zone and/or if flood insurance is needed for your property.

Title insurance protects the lender and homebuyer against problems with a title during the transfer of ownership of the property. Lender's title insurance is most always required by the lender and only protects the lender's interests. Owner's title insurance is not required but is strongly recommended as it also protects the homeowner's interests if a title issue should arise during home ownership.

Is a home warranty the same as insurance? No. A home warranty is usually purchased for a specific amount of time — such as one year. However, some warranties may be purchased on a month-to-month basis. A home warranty provides coverage on repairs or replacement of appliances and other home systems, such as a water heater or HVAC system. There are many different home warranty plans available, and your real estate agent can provide options for you to choose from.

As with all things real estate-related, your real estate agent is a great resource for guiding you to great local insurance and home warranty companies. Start your search for your own local Realtor or one of our many trusted affiliate business members at www.lynchburgvarealtors.com.

Jaysn Schaener is the 2023 president of the Lynchburg Association of Realtors.

Getting quotes on different types of insurance for your property is important before you purchase your home.