If you’re newer to real estate investing you may be overwhelmed with all the new terminology. What can be even more confusing is that some of the terms can have very similar names. For example, what’s the difference between hazard insurance and title insurance? Luckily your local hard money lender, Loan Ranger Capital, will explain the difference here. because we know how confusing this can be.
The most basic explanation of hazard insurance is that it protects you from what might happen to your real estate project. Title insurance protects you from things that have already happened, but may be unknown at the time.
Here’s a more detailed example below:
Hazard Insurance protects from things such as:
- Damage to the house by the environmental elements (this could be fire, hail, windstorm, etc…)
- Structural damage to your house
- Liability for injury or accidents at the home, because this can be especially important with a new build or fix and flip
- Damage to the contents of the home, which is more important once the property is stage and near completion
Title Insurance protects from things such as:
- Defects in title from documents not being filed or indexed in public records properly
- Undisclosed liens or mortgages from previous transactions
- Defects in title from forgery, fraud or other unethical means
- No legal access or entry to and from the property
If you have any questions on any other terminology Loan Ranger Capital is happy to help. We also have a very helpful Frequently Asked Questions section on our website. Just head to the top of our site and click “FAQ.” We’re experts in the industry and want to see our borrowers succeed. Give us a call on your next real estate project and we would be happy to be your exclusive hard money lender.