Buying a home has never been easier for the average American family, despite the fact that housing prices have risen steadily over the last several years (in some areas, nearly doubling in a mere five to ten years). How can this be? Because lenders are now making it so much easier by relaxing their standards for who becomes a borrower and increasing the amount the average person can borrow. In fact, there are now many housing loans that are interest-only, and even buyers with low credit scores can get substantial loans. Adjustable rate mortgages and negotiable terms on low down payments and other unusual programs are increasingly offered to buyers that would once have been considered too high risk. Less documentation and a higher debt-to-income allowance is another reason more people than ever are purchasing homes.

The housing boom means that real estate investing has great potential, but it also means that it also has greater potential risks. Protecting your real estate investments can be done with foresight and the right type of insurance so that you don't run the risk of losing out because of a risky sale or purchase.

Most real estate specialists will recommend that you get both title insurance and liability insurance any time that you're purchasing real estate. Title insurance protects you in the event that any lapses in the title are found before you close on the sale. All property sales include a title search that will make sure there aren't any outstanding liens on the property or legal disputes involving the land or house that could cause problems or question ownership rights. On rare occasions, even a professional title company will miss something - title insurance covers this eventuality. If something is missed, the insurance will cover any liability that could fall on you from missed liens, property line disputes or other unexpected problems that might arise at the last moment.

Liability insurance is exactly what it sounds like - it protects you from liability when someone else is injured while on your real estate property. We've all heard about people being sued because someone tripped on a cracked sidewalk while delivering pizza or broke their arm because a chair broke underneath them in your home. Liability insurance generally covers medical costs, rehabilitation, in some cases lost wages and any damages the injured party might sue for. There are limits to these kinds of policies, so be sure to determine how much coverage you need and how much you can afford.

Additional Coverage's

There are several other types of insurance you can get as well to cover against other unexpected events, including Hazard Insurance to cover what are termed as "Acts of God" that aren't usually covered under standard property owner's insurance. These include everything from Hurricanes to frozen pipes. You can also get insurance to cover losses because of power outages, vandalism and a host of other events.

If your real estate is rental property, you should protect yourself against tenant problems such as property damage by tenants, renters who flee without paying, and tenant disputes.

Any of these policies will have a range of prices depending on how much coverage you get and what kind of deductible you choose. Cost will also vary depending on the value of the property and what part of the country it's located in.

There is one other type of required insurance that you'll have to pay for, but not for your own benefit. If you have a mortgage on your property, the lending institution will insist that you get mortgage insurance to protect their investment. This way, if you default on the loan, they get their money.