If you ever sat down and considered all the different kinds of insurance available for you home (it would have to be a slow day at work for sure), you might be surprised. There’s title insurance, which lenders require. Title insurance is designed to protect the bank (and owner) against other claims of ownership (like someone who shows up with a copy of a will stating that the property was left to her by a long-lost relative). It can also protect against things like mechanic’s liens and property line disputes.
Home owner’s insurance
Beyond title insurance, there is home owner’s insurance. Now don’t get me wrong, you definitely want home owner’s insurance. However, be aware that it doesn’t cover everything. In general, home owner’s insurance covers one-time events. For example, if a toilet overflows and damages floors and carpets, home owner’s will usually cover it. On the other hand, if your roof starts to leak because, over time, the shingles have degraded, it is not covered. Home owner’s tends to cover damage caused by an event that takes place at a moment in time. So be sure you understand what is covered and what is not.
Then there are home warranties. These generally cover (after a service call fee) appliances, plumbing, electrical and other things that wear out over time. Again, read the fine print which tells you what is covered, what the maximum payout is for specific items, etc. Home warranties often have add-ons like pool coverage or wells/septic systems. Some of the home warranties do cover roof leaks, as part of standard coverage; others require you to pay more for that option. They may not, however, cover sewer and water lines between the house and the street. While some do, if you know the water and sewer lines are old, you might want to look into specific insurance for those.
Choose what you need
Obviously, you want to minimize the risk of a large financial burden in the event something goes wrong on your property. Equally obviously, though, you have to weigh the cost of the insurance against the perceived likelihood of a claim. The risk/reward analysis will help you decide what coverage you need.
If you are relocating to the Philadelphia/Main Line area, please go to my relocation tab. If you’d like to read other blog entries related to relocation, please scroll down a couple of lines from here and click on RELOCATION (to the right of FILED UNDER). Thanks!
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