The lender holds a lien on the property until the mortgage has been paid off. To safeguard their interest, lenders want financial protection in the form of a home insurance policy to pay for the cost of rebuilding your home, should disaster occur. A standard homeowner’s insurance policy generally protects against (among other items):
• Fire and lightning • Damage from hail and windstorms • Theft and vandalism • Smoke damage • Falling objects, like tree branches • Damage from the weight of ice, snow, or sleet • Frozen plumbing, heating, AC, or other household systems • Damage done by other vehicles • Riots or civil commotions • Explosions
Homeowner’s insurance policies also generally include coverage for liability, personal belongings, other structures on your property like fences, and additional living expenses if your home becomes temporarily unlivable.
Step 4: Get a Home Warrant
In addition to obtaining homeowner’s insurance, it’s also a good idea to protect yourself with a home warranty as part of the closing process, to give you peace of mind and help you sleep at night.
Essentially, a home warranty is a way of protecting yourself from
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