As my readers know, I often share a reader's question if I think the answer may be useful to other readers. Richard C wrote, "Thanks for the information on escrow. We don't use title companies here; my attorney has always handled my closings. Can you tell me if my title insurance covers my property for physical damage?"

Richard, the simple answer is "NO!". Title insurance is issued by the title (or escrow) company in the form of a "title policy". The title policy insures that you are receiving "marketable title" to your property; in other words, that no claims such as liens exist against your home at the time of issue.

Physical damage to a property is covered through hazard insurance policies. Since it's been about 20 years since I've been a licensed insurance agent, I turned to my "insurance expert buddy", Lorin Bronston of Liberty Mutual. Never one to shy away from using my network to get free answers or advice for my clients, I asked Lorin to explain the basics of homeowner coverage for this out-of-state buyer.

Having moved here from southern California to attend UNLV, Lorin's seen miles of dirt become beautiful, lush developments over the past 20 years. He's a weekend NASCAR official ... I'd pay for the privilege of officiating or announcing at a race! Anyway, Lorin weighs in here for the first time on insurance practices in Nevada.

Many buyers purchasing their first home in Nevada are pleasantly surprised to learn how reasonable homeowners insurance is in our state. While some of this information will seem very basic to homeowners who already own homes in Nevada, we are seeing a large influx of out-of-state buyers who aren’t at all familiar with insurance practices and policies in our state.

For the first time in many years, the price you are going to pay for a home is in line with the value of the home for insurance purposes. In the past, mortgage lenders would require you to carry enough insurance to cover the mortgage balance. In most cases, this was more coverage than was needed to replace or rebuild the home in the event of a total loss. This in turn meant homeowners were paying for higher coverage just to pacify the mortgage companies. Now you’re getting more value for your money.

The type of homeowner insurance you require depends on your situation. If you are purchasing a property for a primary residence, then a standard policy will apply. Standard policies provide adequate dwelling coverage to rebuild or replace the home in the event of a total loss. This type of policy also provides coverage for your personal belongings, liability coverage in the event someone gets hurt, and for loss of use if you need to be “put-up” somewhere because your house is in an unlivable condition.

If you are one of the many buyers purchasing a rental property, you need to cover only the structure itself as the contents belong to your tenants. The structure would be protected in case of damage due to fire, wind, or lightning; the contents would not be covered. Many rental property owners require their tenants to carry a “tenant policy” which provides coverage for their personal belongings while in the property.

Condo coverage differs from detached homes coverage in that condo associations cover the building itself, including the roof. In these cases, you only need to cover your unit from the “studs” in. In other words, you need to provide coverage for the interior of your unit (e.g. appliances, carpets, cabinets and personal property) for damage or theft.

Because Las Vegas is a great place to live or visit, many non-Nevadans are buying vacation homes here. If you’re buying a home that you plan to leave vacant most of the time, you should discuss this with your insurance agent to be sure you have the right coverage in place.

The local media continues to “inform” us on how bad things are in the real estate market. The reality is that home sales are continuing to rise quickly. I know this from the number of requests I get for insurance binders from my clients, mortgage lenders, and title companies. I’m on the frontlines, so to speak, since insurance is a mandatory item to close escrow on a property.

Your Realtor, mortgage agent, title company and insurance agent should work together to help you make the purchase of a property as painless as possible. Generally the insurance premium will be paid through the mortgage process, and your mortgage agent will help you secure coverage, or ask you to contact me to arrange for a binder. If you are a cash buyer, you will likely be ordering your own insurance.

Liberty Mutual does business in all 50 states and many countries, so if I can answer a question for you please feel free to contact me at Lorin.Bronston@LibertyMutual.com.

Lorin is my fellow Board member for Speedway Children's Charities, and I mention this only so I can plug our upcoming golf tournament! If you love golf like you love Las Vegas, I hope you'll come out and join us for some sun and fun as we raise money for children's charities in Las Vegas on June 2.

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