When buying a home in Ohio, what type of insurance coverage do I need?

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Asked January 21, 2013

1 Answer


When you purchase a home, your lender will usually require you to have Private Mortgage Insurance, called PMI. The lender may also require you to carry title insurance, which guarantees that the home you are buying, within certain limitations, is accurately titled and available for sale to you by the owner. Beyond those two types of coverage, you may be encouraged to carry some other types of insurance, but you will not be required to have them as a condition of the mortgage. If you are in doubt about the requirements, contact the Ohio Department of Insurance and ask for an explanation of the requirements for home buyers.

Home insurance packages are designed to protect you and your family against a possibly catastrophic loss. Your lender's investment is covered under the PMI, but your own investment must be protected separately, through a homeowner's policy. This type of policy protects you against financial loss related to damage or destruction to the home, burglary, and liability claims which happen on your property or are caused by it.

Some mortgage companies also want to sell you a home warranty. This type of insurance warrants the appliances in the home against failure, including your HVAC system, the hot water heater, and any other appliances which came with the home such as a dishwasher or refrigerator. Home warranties are not mandatory, and you would be well advised to research the age and condition of your home's appliances before purchasing the property or a warranty. In many cases, setting up a savings account and making regular contributions to it will give you an acceptable alternative to a home warranty.

Flood insurance is not included in any standard homeowners insurance policy, but the best advice that can be given to homeowners is to purchase a flood policy. Flooding may be more likely if the home is located in a flood zone, but there is not a state in this country which is not subject to flooding on occasion, in or out of designated flood zones and low-lying areas.

You may want to supplement your homeowner's policy with additional coverage or riders. Increasing the personal property limit is typically a good idea, for instance, and increasing your liability coverage makes sense if you have a number of assets which could be targeted by a potential liability lawsuit.

Answered January 21, 2013 by Anonymous

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