Types of Insurance for Real Estate in Georgia

There are at least 14 common types of insurance you can get for a home:

(1) Homeowner’s Insurance(Renter’s insurance if buying a condo or renting) is what most people think about when buying a home to protect the homeowner from damage to structure and contents caused by fires, floods, liability of someone getting hut on your property and pluming leaks. Evaluate insurance providers and coverage at www.ambest.com.

(2) Mortgage Insurance: Insures the lender for the % above 80% loan value of the subject property. It can run anywhere from below $100 to close to $20/month – just depending on the risk and amount above 80%. Make sure you factor in this cost if you place <20% down on your next home purchase. (3) Lender’s Title Insurance: Insurance that protects the legal and financial interests of the lender on a real property. In case there’s a legal fight regarding ownership or other challenge to the property’s title, this insurance provide the legal assistance to fight any claim and if claim results in loss of property, the lender’s loan amount outstanding is reimbursed by the title insurance company.

(3) Owner’s Title Insurance: This is an optional insurance normally offered at closing (and in some cases, I believe can be purchased within a limited time after closing but usually at a higher cost).

(4) Renter’s Insurance (for Condo Home Ownership): if you buy a condominium, the condo HOA will carry a policy to cover the rebuild of the condo itself, but only up to a minimum standard and may not include the upgrades to flooring, kitchen, bathrooms, etc, that you made to the place or cover the loss of your contents. Therefore, you should carry an equivalent to renters insurance for condos that includes rebuilding the unit to your specifications.
Note: Experts recommend H)-6 policy designed to cover not only property loss, but personal injury inside your condominium unit or caused by the operation of your unit.

(5) Flood Insurance: Generally, your lender will check to see if your property is located in a federally specified flood zone and from that investigation will determine if you do or do not need to carry flood insurance. If you do need it, the next step is an flood elevation survey to determine if your dwelling lies inside or outside the flood zone and may require private or government flood insurance to protect the lender’s investment in case of flood loss. Existing federal laws have changed and in some cases, this insurance can cost thousands of $ instead of hundreds of $ it used to cost. Visit https://www.floodsmart.gov/floodsmart/ to review information, potential coverages, and providers.

(6) Home Warranty (Home Maintenance Insurance): This type of insurance is just peace of mind that in case you have something go wrong and need a plumber, electrician, HVAC tech, or other home appliance service tech in a rush, then you have a “one-stop-shop” to call to get assistance. There’s usually a rice call fee as a deductible and perhaps a $ limit on how far a repair can go before you have to pay the difference, but many emergency calls are handled quite inexpensively. Note: These warranties can be extended to appliances such as washer, dryer, secondary refrigerators, etc., which can be covered for an additional expense. Visit my blog post on residential home warranties to review potential some warranty companies and coverages.

(7) Termite/Wood Infestation Insurance: In Georgia, pest control experts say there are three types of homes: those that “had” termites; those that “have” termites, or those that “will have” termites. Termites aren’t the only wood boring or destroying insects (e.g., powder post beetles and others). In order to help prevent you from getting any of these pests, there a two basic types of protection: liquid or bait system. The two types of coverage can be: retreatment only or repair/retreatment. Pros and cons of both are too long for this post, but some level of protection from them is encouraged. It can run from several hundred to $1,000+ cost for establishing protection and another $200 or so per year to maintain protection. Visit Georgia Pest Control Association website for more information and identify licensed pest control companies in the State of Georgia.

(8) Major Foundation and Structural Insurance on New Homes: This type of coverage is only available for a brief period (i.e., 10 years) on new homes and normally handled by just a small group of insurers like the 2-10 Warranty Company. The warranty can be purchased and provided by a builder or you could purchase it directly under certain circumstances. It only protects you for any defaults or problems with the structural quality of foundations or overall structure of the building. But you normally have to go before an arbitrator and it may cost several hundred dollars to submit a claim…so you need to have an expert investigation to determine the fault lies with the builder before you present your case.

(9) Mortgage Payoff Insurance: This insurance pays the mortgage upon your death. But unless you have someone that could benefit from this immediate payment of mortgage, why would you want to do it? Life insurance is best to leave with a person and let them decide if they want to keep the house or continue the mortgage and make that financial decision themselves.

(10) Stucco Warranty (Stucco Insurance): If you have a company complete the repairs and guarantee their workmanship, you are insuring against future issues with what they repaired with an option to renew that guarantee next year by having them reinspect and determine if other repairs are necessary.

(11) Appliance Extended Warranties: If you purchase an appliance, then the the store, manufacturer, or a 3rd party vendor normally offers additional parts & labor warranties for several years for an additional nominal fee. I am not sure they are always worth purchasing, but you can research reviews on appliance performance and determine yourself if you don’t have first hand experience on the subject.

(12) Mortgage Life Insurance: This insurance covers the payoff of the mortgage balance in certain cases of death and may be used under certain cases of incapacitating diseases or disorders. The amount of coverage changes over the life of your loan based on your “eligible” mortgage balance.

(13) Security Insurance (Home alarm and personal safety): You can have a security system installed that not only alarms you of intruders but is monitored by an alarm center to notify police, fire, or emergency responders in case of trouble. Some systems now alert you via the internet and you can monitor the interior of your home online from your work computer. Sometimes they offer a minimal discount on homeowner’s insurance, but the main benefit is peace of mind that your family and authorities can be notified immediately of a break-in or other distressful situation.

(14) Radon Gas Insurance: If you have a Radon Gas inspection and the results reveal high levels of Radon Gas, which usually requires remediation (which normally means digging under foundation, installing a PVC pipe running to the exterior with a fan inside which emits the radon gas outside), it may normally cost around $1,000-2,000.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

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