Your home is your
castle. It is where you store and use all
of your most personal items. Your family photo album is
probably stored on a shelf in your bedroom closet, and those
beautiful antique lamps you got on your honeymoon are carefully
placed on the end tables in your living room.
If your house burns to the ground, or a thief breaks in while
you are away from home, you may lose valuable possessions and
items of sentimental value.
These items may be
irreplaceable, or they may be items you can purchase in a
store. The fact is: you need the money to
build a new home, buy new furniture and replace those
items you use every day. Without insurance you
may be homeless and you may find it difficult to replace
all of your personal possessions - clothing, towels,
blankets, mattresses, musical instruments, furniture,
sports equipment, kitchen articles, toys, TVs,
electronics, and computers to name a few. You
CAN own a home without obtaining a homeowner’s
policy. However, if you finance your home,
your mortgage broker or lender WILL require you to have
insurance to protect the investment of cash they have made
in your home.
If you live in a flood zone or in an area that is likely to
experience earthquakes, the lender or bank will also require
you to carry flood or earthquake insurance. If you
purchase a condominium or co-op, the board or association will
probably require you to buy insurance to protect the other
homeowners, and the common areas that may be affected if a fire
starts in your home or some other accident or disaster
occurs.
If you
own a private home, and your mortgage is paid, you do not have
to carry insurance under law, but it is wise to do
so. Unless you are independently wealthy and can
replace your dwelling and all the contents within it, you
should have insurance to protect you from property damage, or
theft, and to protect yourself from litigation and liability if
someone is injured on your property. Let’s look at the
various types of insurance you might need or want if you own a
home, co-op or condo, or rent an apartment.
Here are some definitions:
Ø Title
Insurance – This policy is purchased when you are buying your
home. A fee is paid to the title company and included in
the closing costs. The title company performs a
‘title search’ in all available public records, to be sure that
the title to your new home is free and clear of any liens or
litigation. They will look for things like liens
for unpaid property taxes, liens from building contractors,
heirs of previous owners, or errors on deeds.
Ø
Homeowners Insurance - This policy provides coverage and
reimbursement if your home, condo or property are damaged, and
also covers you against any liability you may have if someone
else is injured on your property.
Ø
Renters Insurance – These policies provide coverage and
protection against loss and damage or destruction for your
possessions inside a rented house or
apartment. Keep in mind that your landlord is
under no obligation to cover your property for fire damage,
theft or other destruction, so if you want insurance, you have
to take out a Renters’ Insurance policy.
Ø
Flood Insurance – You can get a flood insurance policy as a
homeowner or a renter or tenant. If you
live in a designated flood zone, you will need flood
insurance. Flood insurance does not take effect for
30-days, so you’ll need to take that time period into
consideration when you apply for a policy. Now that you know
the basic types of insurance that apply to dwellings, homes,
condos and apartments, let us examine the detail of each
of these types of policies:
Renters Insurance
Flood and
Earthquake
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