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Steps for Buying a Home
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Other Types of Insurance

Additional InsuranceTo protect yourself from catastrophic events, you may also want to consider acquiring these additional types of insurance:
  • Disability — Social Security offers two types of disability insurance based on your age and financial need. It is also possible to purchase private disability insurance. This insurance is particularly important for self-employed individuals whose income relies on their ability to work. Both short-term and long-term programs are available.

  • Umbrella — a personal liability umbrella policy supplements the liability coverage provided in your homeowners insurance package and would protect your home and other assets if you were found negligent and/or liable for a claim against you.

  • Flood/Earthquake — if your home is located in a federally designated flood zone you will be required to buy flood insurance, which is available though Federal Emergency Management Agency’s (FEMA's) National Flood Insurance Program (NFIP). Standard homeowner policies do not cover flooding even though they may cover wind and rain damage. More information on flood insurance is found on the FEMA Web site. Similar to flood insurance, earthquake insurance must be offered separately in earthquake-prone areas.

  • Condominium — a condominium association insurance policy covers the building and common areas, for which you pay a percentage in your monthly association dues. Although not required by your lender, it is a good idea to purchase condominium insurance to cover your personal belongings and any liability incurred for damage to others. Condominium insurance covers you from losses due to fire, smoke, vandalism, theft and some water-related damage. A comprehensive form also includes wind damage. Also, ask if “loss assessment” insurance is available. This would protect you in case the condominium association became liable for a large amount of money that exceeded any available insurance coverage and divided this liability amongst all of the homeowners in a prorated amount.

  • Mortgage Life Insurance — this type of policy only pays off your home loan balance in case of your death. It should not be confused with regular life insurance or PMI. In many cases, a term life insurance policy in an amount adequate to cover the home loan balance would be more cost effective and would provide a benefit to your heirs.
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  Countrywide Home Loans, a division of Countrywide Bank, FSB is an Equal Housing Lender. © 2007 - 2008 Countrywide Financial Corp. Trade/service marks are the property of Countrywide Financial Corp., and/or its subsidiaries. All rights reserved. The content of this website is provided for the convenience of our readers and is for informational purposes only. Readers are encouraged to use the content of this website to supplement their knowledge and to also seek out other reliable sources of information prior to engaging in the home financing and home buying processes. The information featured herein is intended to be accurate and we will make efforts to keep this website updated. However, due to the rapid changes occurring in the programs, products, services offered within the home financing industry, we do not guarantee the accuracy of the information presented. Countrywide is not responsible for the contents of, or products or services offered on, third party Web sites and provides links to such sites solely for your convenience. This is not a commitment to lend. All rights reserved.