Homeowner's Insurance and Title Insurance - What's the difference?

Homebuyers should know the difference between homeowner's insurance and title insurance

While many homebuyers do their research before diving into the homebuying process, it can still be a very confusing experience due to the sheer amount of information involved. The homebuying process, coupled with today’s competitive market, can pressure homebuyers to speed through parts of the journey without a deep understanding of what they need, or in some cases, don’t need.

Title industry experts have found that only 1 in 5 homebuyers understand the documents presented to them during the closing process. Many homebuyers don’t fully understand what title insurance is and why it’s so critical to protecting their property rights. Part of the part of the problem is that title insurance is easy to confuse with homeowners’ insurance. 

In the simplest terms, title insurance protects your property rights. It is a unique form of insurance that, per the American Land Title Association emphasizes risk prevention than risk assumption. While a homeowners’ insurance policy protects the physical and tangible assets of a home, a title insurance policy protects new homeowners from any past issues affecting their right to own and use the property.

Homeowners' insurance protects a person from unforeseen issues related to their property. Just like other forms of insurance, homeowner’s insurance can be customized and enhanced, so it’s crucial to fully understand what type of policy will best suit your needs. It’s really a packaged policy that encompasses multiple areas related to your home.

Title insurance is a one-time premium for coverage that lasts as long as you own your home.  It doesn't go up after you purchase your  home.  Homeowners' insurance requires the payment of an annual premium which may increase from year to year.

If you would  like to know about title insurance, let us know!

 

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Home Warranty and Home Insurance, what's the difference?

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

This post about the differences between a home warrant and homeowner's insurance is an oldie but a goody from Plymouth Rock Insurance and is worth setting out in full.  Just remember, neither are title insurance.  We can give you that!

What’s the Difference: Home Warranty Versus Home Insurance

August 9, 2016

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Last updated on July 19th, 2018 at 06:10 pm

If you own a home, you probably already have a homeowners insurance policy. If you’re shopping for a new home, you may have been approached about buying a home warranty or had one offered as part of your real estate deal. While both offer protection for your home, they’re not the same thing and it’s important to understand the differences between a home warranty versus home insurance.

What You Should Know

1. A home warranty generally helps to cover appliance or equipment breakdowns, whereas home insurance helps you repair your home from unexpected damage or situations, like fires and theft.

2. You might not have to purchase a separate home warranty. If you have home insurance through Plymouth Rock, you might be able to add optional coverages that are similar to home warranties, like equipment breakdown and utility line coverage. Plymouth Rock’s coverages can be cheaper than purchasing a separate home warranty.

If you want to know more about home insurance coverages, Plymouth Rock has handy resources for you to check out.

3. If you’re financing the purchase of your home, most lenders require homeowners insurance, but home warranties are typically optional.

Still, a home warranty could be a smart purchase depending on your own situation because it might help you control your budget for home repairs. And, when it comes to buying/selling real estate, a home warranty can offer benefits for both buyers and sellers.

Say, for example, there’s a home on the market that has a furnace and air conditioning system that’s up there in age. As a buyer having a home warranty might be a good way to guard against breakdowns or malfunctions. As a seller, offering a home warranty can help to assuage potential buyers who might be leery about buying a home with older HVAC systems. 

How Each One Works

When you buy a home warranty, you purchase a service agreement that pays for the repair or replacement of things inside of your home when they break down. Compare that to home insurance, which covers your home’s actual structure and your possessions. You should check your own home insurance policy to find out exactly what it covers.

Here’s an example to help you understand the difference: your insurance policy may help to replace your washing machine if it’s damaged by a fire, but a warranty may help replace it if it simply breaks down (however, it will depend on the terms of your service agreement).

If you do opt to purchase a home warranty, you can purchase different levels of protection. Basic warranties typically cover appliances, but you can even upgrade to cover things like a swimming pool. It’s also a standard practice for most warranties to include a modest deductible.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

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Flood insurance - a primer for homeowners

What is a "flood" that is covered by flood insurance?  Well, it's not a sewer backup unless you purchase that specific coverage from your insurance broker.

Writing in the Detroit Free Press Susan Tompor covers " Hard lessons about flood insurance policies."  Among them, know what your policy insures.

Many sewer lines across the country are aging. Pipelines that handle both storm water and sewage can become overwhelmed and back up.

J. Robert Hunter, director of insurance for the Consumer Federation of America, said his son faced damage from a backed-up sewer in Baltimore and was covered. But he said many people don’t realize they need to buy an endorsement or they don’t ask if their standard policy offers the coverage.

So, before the next storm or sewer backup, it might be a good idea to check your flood insurance and homeowner's insurance policies to determine what is and is not covered.  Read the full article.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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