What is a Homeowner’s Policy?
There are two types of owner’s title insurance policies certified by the American Land Title Association – the Owner’s policy and the Homeowner’s policy. The Owner’s policy protects you from defects and liens in the history of your title through the date and time your deed is recorded in the public records. The Homeowner’s policy takes your protection to a higher level by providing coverage for many additional risks – including some that might occur after the deed has been recorded. The Homeowner’s policy protects against many common, frustrating problems; and protects your investment for as long as you or your heirs own the property. Read on for a description of some of the additional coverage’s you’ll receive when you upgrade to a Homeowner’s policy.
What are the benefits of a Homeowner’s Policy?
There are many reasons to invest in or ask a concierge about a Homeowner’s policy. Like an Owner’s policy the purpose of the Homeowner’s policy is to ensure and protect the homeowner and their interests during the purchasing of a new home and the duration of the deed to the title of the property. A Homeowner’s policy can be very beneficial if not crucial for a new homeowner to ensure that their best interests remain protected during the duration of their deed. Everyone knows that a house is an investment, and many people buy houses with the intention of living there for many years or for investing their money into a booming market. Either way, it is important to consider a Homeowner’s policy in order to ensure that you are able to enjoy those benefits of buying a house to the fullest.
Saves you money
One of the most obvious benefits of a Homeowner’s policy is how one can save you money in the long run. A Homeowner’s policy can include Building Permit Violation Coverage that covers up to $25,000 after a deductible equal to the lesser of one percent of the policy amount, or $5,000. This coverage applies if you have to remove an existing structure (excluding boundary walls and fences) built by a previous owner who did not obtain the required permits.
A Homeowner’s policy can also include a Subdivision Map Act Coverage that will pay up to $10,000 after a deductible equal to the lesser of one percent of the policy amount, or $2,500. This coverage applies if you cannot close a sale, secure a loan or obtain a building permit because the land was improperly subdivided prior to purchase.
When considering a policy it is also important to consider the existence of Other Substances on your property. With a Homeowner’s policy all existing structures and landscaping (including future replacements) on the property, against damage caused by others using the land for extraction and development of minerals, water and other substances.
Asides from financial protection a Homeowner’s policy also includes Automatic Coverage Increases so that for each of the first five years, the policy amount will automatically increase by 10 percent in value, up to a total of 150 percent, to cover increases in the value of the insured property.
Protects your property ownership interests
When you buy a house, there may be several things you may assume are your right or would be necessary to ensure that you are able to enjoy the property in the way that you expected you would when you made the down payment and signed the deed. In order to protect or ensure your ability to ensure coverage from circumstances such as Location Coverage that ensures that the home has the same address as the property insured in the policy.
Other benefits such as Zoning Coverage that protects if you are forced to remove or remedy a structure because it violates zoning laws. Protection for forced remedy of violations is subject to a deductible and a maximum dollar amount.
Do you plan on walking or driving to your property? Then it may interest you that a Homeowner’s Policy includes Enhanced Access Coverage that covers actual pedestrian and vehicular access to the property.
What about the land around your property? While we all know that our direct power lies in the land outlined within one’s deed, location is still crucial to real estate. CRE Mainline Real Estate understand how important location is when choosing house to look at, and organizes their properties by area accordingly for the convenience of house-hunters. Luckily, a Homeowner’s Policy is also beneficial in it’s inclusion of an Encroachment Coverage that protects homeowners against the circumstance that someone attempts to build a structure (excluding boundary walls and fences) that encroaches on the insured property.
Protects your contract
Along with helping you get the most out of your homeowning experience, a Homeowner’s Policy helps to protect the homeowner from some of the nuisances and annoying situations that can occasionally target homeowners in the ways they least expect when buying a home. By including
-
- Restrictive Covenant Violations Coverage: Which protects against the loss of title if someone attempts to enforce an existing restrictive covenant due to a violation that occurred before the policy date.
-
- Post-Policy Coverage: A type of coverage that will protect against possible post-policy ownership claims as a result of forgery or encroachment.
-
- Supplemental Taxes: Protection against supplemental taxes for construction, change of use or ownership.
-
- Living Trust Coverage: Coverage that will extend you policy protection to include a trust you create.