Unlike most other purchases, a home purchase is a major investment that requires adequate protection against destruction and damages through a typical homeowners’ insurance policy. Most mortgage lenders require borrowers to purchase this policy to protect the property against damages over the life of the loan. One can expect the following coverages in a standard property insurance policy:
- Certain weather events such as hail, windstorms and/or lightning strikes
- Damage or theft of personal property
- Injuries to guests or visitors
Buying a foreclosed property often includes additional risks for which a standard homeowners’ policy is not adequate.
Tailoring Your Coverage
Foreclosed properties can often be purchased for relatively little money. Often, these properties are sold as-is, containing significant levels of damage due to negligence from previous owners. Lenders may require higher levels of coverage or special extensions such as foreclosure insurance before approving a sale. It’s important to be prepared at every point of the purchasing process for a successful outcome.
Finding the Right Insurance Company
Just as no two properties are the same, no insurance providers are the same. While you have many options for a homeowners’ insurance provider, it’s better to work with a provider that understands the risks of a foreclosure and can make sure that your policy meets the specific needs of your home.