In almost all cases, your lender will require that you purchase homeowner's insurance to protect you from any type of catastrophic loss related to your property. Additionally, the coverage protects you from the liability of being sued in the unfortunate event that someone becomes injured in your home. In the event your home is destroyed, such as by fire or flood, your homeowner's policy will cover the cost of rebuilding your home.

The dwelling coverage section of the homeowner's policy relates to the rebuilding costs due to destruction. The cost is directly related to the rebuilding cost, which is based on the home's square footage. Always be sure to obtain a policy that provides replacement cost provision. This ensures that even if the cost of rebuilding your home turns out to be more than the policy coverage originally stated, you will still be guaranteed replacement cost.

Your liability coverage should be equivalent to a least twice the value of your assets, and your personal property coverage should be approximately 50 to 75% of the dwelling coverage amount.

Having photographs or videotape of your personal belongings (located somewhere outside of your home, in case of a fire), will help you to provide documentation if you ever need to file a claim for such a loss.

Title insurance protects the ownership of your home, and there are two types to choose from: standard title insurance and extended title insurance.

Standard policies are the less expensive option because they offer limited coverage. The ensure that there are no defective or fraudulent recordings against the title of your house, nor liens or judgments against the title.

Extended policies include the aforementioned coverages plus unrecorded liens, leases, or contracts of sale.

Along with the type of coverage you select, the cost of your title insurance will also be influenced by the price of your home and the area in which you live. Whether the buyer or seller pays for the title insurance is negotiable, and a buyer offering to pay for title insurance sometimes has an advantage over competing bidders.