Kovats Real Estate School Practice Test 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

What does the term "insurance" in PITI generally refer to?

Life insurance

Homeowners insurance

The term "insurance" in PITI, which stands for Principal, Interest, Taxes, and Insurance, generally refers to homeowners insurance. This insurance policy protects the homeowner’s property against various risks, including fire, theft, and some types of damage. It's a critical component of homeownership because it not only protects the homeowner's investment but is often a requirement by lenders as a condition of obtaining a mortgage.

Homeowners insurance ensures that the homeowner is financially safeguarded in case of unforeseen events that could damage the home or personal belongings. It also can cover liability if someone is injured on the property. While other types of insurance, such as mortgage insurance or liability insurance, may play roles in different contexts, homeowners insurance is specifically included in the PITI calculation to ensure the property is insured as long as there's a mortgage in place.

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Mortgage insurance

Liability insurance

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