If you have a property, you must have worked a lot to buy it. Also, you must have worked to buy the stuff you have inside your property. Therefore, it is always good to think about protecting it with home insurance.

In the same way, you protect your car after buying it to avoid losses in case of damage or theft; it is recommended that you consider insurance for your house after purchasing it.

Although you are not obligated to do it, it is always a reasonable thing to think about.

However, you must know everything before applying for home insurance.

Furthermore, home insurance is not the same as warranty and mortgage insurance. Therefore, keep reading to find out all about it!

Home insurance is coverage that protects you from accidents or unexpected situations that happen to your house and yourself.

Usually, the standard policy includes theft, wind damage, and fire. However, there are other types that may include a comprehensive list of risks.

Also, it does not only covers your house in protection but may include your belongings and even you and your family in case of liability protection and injury.

Usually, there are three traditional types of coverage with different prices.  Although you are not required to have one, it is definitely worth considering.

In addition, it is worth mentioning that if you apply for a mortgage, it is likely that your lender requires you to sign home insurance first.

Home insurance works as any other type of insurance. It offers protection for your property and can include belonging and even yourself and your family.

In general, this insurance covers accidents and unexpected situations, such as fire, wind damage, and theft.

However, it can include much more. It depends on the policy you sign for.

Usually there are three types of insurance, as described below:

Basically, home insurance policies vary widely. So, it is hard to measure prices and coverage details. You must search for different types of insurance companies to determine which fits your needs better.

For example, some policies include earthquakes and damage due to water from storms. If you don’t live in a place where earthquakes happen, you don’t need to consider signing for a policy that covers it.

Furthermore, it is essential to keep in mind the price of covering your property. The prices not only include the items covered but also include many other factors, even your home location.

Getting a quote before deciding on home insurance is crucial.

Unlike home insurance, a home warranty applies for home systems repairs and replacements. It includes appliances like dryers, refrigerators, ovens, water heaters, and more. 

Warranties are contracts that last for a period of time, usually a year.

And it covers problems that occur because of poor maintenance or wear and tear on appliances and home systems.

In general, insurance doesn’t cover that, although you may find some comprehensive and expensive policies that may include that.

But if you have a warranty on your items, you don’t need to consider home insurance that covers what a warranty does.

Home insurance also differs from mortgage insurance. Usually, mortgage insurance is required when a homebuyer or borrower makes a down payment of less than the regular 20% of a property cost.

Therefore, mortgage insurance is a protection for the lender, not the buyer or the property.

For example, if you want to go after an FHA loan, you need to keep in mind that it requires mortgage insurance.

Most banks also require that for the borrower who doesn’t meet all mortgage requirements. 

So, in summary, home insurance covers your property, while mortgage insurance protects the lender in case you fail on payments.

Speaking of failing on mortgage payments, you already have probably heard of refinancing your home loan.

Sometimes, it is not worth it. Other times, it can save you by lowering your rates and redefining terms and conditions.

Also, you can eliminate mortgage insurance when refinancing your current mortgage. This usually happens with Federal Housing Administration (FHA) loans.

To find out the advantages and disadvantages of applying for a mortgage refinance, follow our next post.

It explains to you what a mortgage refinance is, how it works, and the factors you must consider before signing up for a refinance option.

Also, we show you a reasonable option you can rely on in case you consider refinancing your mortgage. 

Check it out!