Certificate of insurance: form that shows insurance policy coverage, limits, etc; needed as proof of insurance.

Flood insurance. Insurance for losses to the property from water damage. Sometime required by a lender and may be an add-on to basic hazard insurance. Many standard policies do not include flood coverage. Ask your lender and insurance agent

Home owners/ hazard insurance: This is a required covenant by the lender. It is insurance against specific losses to real estate which includes fire or other natural causes plus loss of personal property. This is NOT mortgage insurance. It will not pay off your mortgage if your home burns down. This insurance will help rebuild or pay for repair to the property to make it insurable again and help defer costs from loss of personal property. The insurance premiums are calculated into the monthly mortgage payments. An escrow account is created to separate the Home owners insurance and taxes which will be paid every 6 months.  This can vary but is typical. www.gerrysmithinsurance

Insurable interest: Stake that a borrower, lender or owner must have in real property in order to get insurance on that property.

Insurable title: title to a property for which a title insurance company has agreed to issue a policy.

Insurable binder: a document written by an insurance company that states that temporary insurance is in effect on the property.

 (This is required at Closing.)

Mortgage insurance: an insurance contract that will pay the lender should the borrower default on the loan.

Mortgage life insurance: insurance policy that will pay the mortgage due if the primary borrower dies.

Private mortgage insurance (PMI): agreement to give money to the lender if the buyer defaults on his or her payments. The PMI cost is included in the monthly payment and may not be required at closing if borrower is putting 20% down. The PMI can be removed at a later time by establishing 20% equity in the home. Note: an appraisal is required to establish the 20% equity; a cost to home owner but in most cases will be recouped in 6 months to a year.

Title insurance policy:  This policy is usually purchased by a seller for the buyer to insure against loss due to defects in a real estate title. The policy protects both parties from claims of ownership down the road. Buyers are encouraged to purchase a policy if the seller does not. Make sure to ask who is paying for the policy before the closing to be clear.