For most people, one of the reasons to buy home insurance is because it’s required for lenders to approve their mortgage. While this might make you feel forced to buy to get your dream home, it’s far from the truth. Home insurance is essential for all homeowners’ protection.
Going without home insurance is a huge gamble, especially if your dream house is in a neighborhood prone to crime or natural disasters. You could be responsible to pay tens or hundreds of thousands of dollars for repairs out of your pocket if a flood or tornado damages or completely destroys your home. The premium you’ll pay for home insurance won’t come close to comparing to such large expenses.
Getting home insurance should be on your priority list if you want to protect your home from damages, manmade or otherwise, and protect your finances. If you’re still not convinced, here are some reasons you must get home insurance.
Satisfy Your Lender
The law doesn’t state that home insurance is necessary when purchasing a home. However, most lenders nowadays require their borrowers to get home insurance when applying for a mortgage. But why is it essential for them, too? The insurance will protect the lender’s investment if the house gets damaged.
Typically, lenders want the insurance to cover the entirety of the mortgage itself. If not that, you’ll have to pay forced coverage, which is much more expensive than regular home insurance.
Protection from Loss of Use
In a situation where a disaster occurs and your house gets destroyed completely, whether it’s a manmade disaster or not, your homeowner’s insurance can cover everything for you. However, this depends on the coverage you have on your insurance. Unfortunately, not all insurance is created equal, and not all of them cover everything. A lot of people these days are insured insufficiently.
With full home insurance, like the one you can get from Assurance, you can be covered for external structures such as garages, sheds, and even dog houses. It can even cover your appliances and other expensive belongings inside the house. Of course, it also covers essential services like damage to plumbing, wiring, and HVAC systems.
Protection for Stolen or Broken Things
Home insurance can also cover your belongings that are lost or broken. Most insurance will reimburse you the value of your lost property, including appliances, clothing, furniture, and gadgets. What’s great about this coverage is that it can even include things not currently in your house, like things in a storage unit or your kid’s school locker.
Most policies let you choose whether you want actual cash value or replacement cost coverage. What’s the difference between those two? Most things depreciate as the years go by, so if you want to recoup the amount you’d expect your items to be sold, minus the depreciation, go for actual cash value. On the other hand, replacement cost coverage gets you a brand new replacement of whatever broke or was stolen.
Coverage for Personal Liability
Accidents can always happen. Sometimes they can involve other people, like guests in your home. You could be liable for the accident. Covering a person’s medical bills out of pocket can be a pretty hefty expense, especially if the injury is serious. Your home insurance can also cover costs if someone gets injured in your house.
In cases like this, the coverage can go up to millions, depending on the type of injury your guest had. Of course, you might not be able to pay for this yourself. Why not be certain you have personal liability coverage so your insurance will pay it for you?
Protection Against Robbery and Theft
Even if you have all the latest security measures in your house, theft and robbery are still possible, especially if you live in a neighborhood that’s prone to crime. You can have home insurance coverage for cash or property that gets robbed. In this case, you can also opt for either actual cash value or replacement cost coverage.
However, make sure you remember how much your stolen property cost. It’s always wise to keep an inventory of the valuable things you have in your house. Keep a hard copy somewhere safe and not only on your computer, as all electronics might get stolen.
Home insurance is critical if you want to protect your property and finances. If you’re still not convinced, tally up the losses and expenses you’ll have if something happens to your house (or the things inside it). It’s better to opt for a monthly premium than owe or pay thousands. And if you’re already insured, check out your policy to make sure it covers what you think it should, and decide if you need better protection.
This sponsored content is provided by Assurance.
Real Estate Term of the Week
Personal Liability Insurance: The personal liability coverage within your homeowners insurance policy provides coverage to pay for claims of bodily injury and property damage sustained by others for which you or covered residents of your household are legally responsible.