By Juhlin Youlein

Owning a home is one of the most important investments an individual will make in their lifetime. One of the reasons why homes are considered by many to be one of the best investments an individual will make in their lifetime include the appreciating value or the historical increase in home prices over an extended period of time. Homes are also one of the most expensive investments an individual will make and so the combination of high price, appreciating value and the fact that homes are a useable commodity are all ingredients to a successful investment. In other words, homes are not just a claim in a company like stock, homes are an actual tangible place where people live, eat, sleep, etc. Because of the real life useable value of a home, just like a car, the home needs insurance. Cars need registration, a transfer of title, insurance, licensing, etc, and so do homes. Here are the different types of insurance a home buyer will need.

The first type of insurance a home owner will need is title insurance. Title insurance is a unique niche in the insurance world. Imagine buying a home, thinking the whole transaction went smoothly, and the home is official switch over. Then imagine starting a family in the home, raising children, creating memories and then suddenly finding out the title was not ‘valid.’ What an awful scenario for a home owner to face. One way to make sure this never happens is title insurance. Usually just one small payment at closing and the title company will insure that the title will ever be discovered as invalid.

The second type of insurance an individual will need is homeowners insurance. When over ninety percent of home owners want to buy a home, they do not have the capitol on hand to buy the home. So the buyer must get the money from a lender. The buyer will then use the home as collateral to the lender in case the buyer stops making payments on the loan. Well, if the home gets burned down, suddenly the buyer realizes they have a loan for two hundred thousand dollars and no value and will just walk away from the loan and the lender will have no collateral to recoup the value of their loan. To insure this scenario does not play out, the lender will require homeowners insurance. The beauty of homeowners insurance is that not only does it cover fires; it also covers theft and liability. Sometimes covering up things like wedding rings and other valuable heirlooms the family might be in possession of.


The third type of insurance is flood insurance. Some regions of the country are super susceptible to flooding. One issue with flooding is that the flood might wipe out an entire neighborhood and if everyone was insured by the same insurer than the insurance company will go broke so most flood insurance purchases come from the government and cover up to two hundred and fifty thousand dollars.

The final insurance we need to mention are home warranties. If a buyer builds a part of the home that proves to be faulty, they will probably verbally promise to come and fix the broken plumbing or whatever the problem is, but will never show. A home warranty will ensure that if the plumbing or electricity or another structural part of the home is faulty, it will be fixed.

All the different insurances will usually be available or need to be purchased as the home closes.

About the Author: Juhlin Youlien writes about az real estate including Paradise Valley AZ homes for sale and Fountain Hills AZ homes for sale. He doesn’t just feature Paradise Valley real estate, but also Gilbert AZ homes for sale and other AZ cities.


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