Life is full of expenses. You may be asking yourself: do i need homeowners insurance? Is it really worth it? We take a look at why the answer to that question will always be an emphatic yes!
Although homeowners insurance is not a requirement in some states, most mortgage lenders and banks require you to have this coverage. If you are buying a home, there is so much to consider, and you may be wondering, “Do I need homeowners insurance?”
Homeowners insurance protects your home, property, and belongings against loss, damage, and liability. It protects more than your house and acts as a safety net for you and your family.
Life is full of expenses. But if you are wondering if homeowners insurance is really necessary, the answer is an emphatic yes!
Let’s take a look at why homeowners insurance is a must-have.
Protection From Loss
Disaster can strike no matter where you live. Homeowners insurance protects you from devastating loss.
In the event of a natural disaster like a fire, tornado, or hurricane, homeowners insurance pays for repairs or the replacement of your home. It normally does not cover floods or human-made calamity, however.
Many people do not carry adequate insurance coverage for their home. It’s important to make sure your policy covers your home and its contents.
Replacing Your Possessions
It’s devastating to lose your possessions, especially sentimental or very valuable items. Your homeowner’s policy should reimburse you for your possessions, including furniture, appliances, clothing, or other valuables.
Many homeowners policies offer a choice regarding how to insure your possessions. You can get replacement cost coverage or actual cash value for your things.
Most possessions depreciate over the years. Replacement cost coverage allows you to replace items at their current price.
Actual cash value lets you recoup the same amount you’d get if you sold the items minus depreciation.
Most insurance companies offer personal property coverage up to 70 percent of the total amount of insurance on your home or structure. For example, if you have a policy on your home for $100,000, your personal property coverage should be $70,000.
Pays Medical Costs
Your homeowner’s policy should cover the medical bills of anyone who injures themselves and is not covered by general liability. If a friend or a family member has an accident on your property, your insurance should pay for expenses such as a hospital stay, ambulance, medical tests, and even funeral expenses.
“Guest medical coverage” protects your guests But it also protects you from having to pay for someone’s medical bills.
Limited liability protection protects you from lawsuits that may result after an injury occurs on your property.
Protects Your Equity
For many of us, our home is our biggest investment. Your home’s equity is the complete value of your property over and above your mortgage or any liabilities.
Your homeowner’s insurance protects the equity in your home.
As you make renovations or improvements to your home, your equity increases. Homeowners insurance ensures that if something happens to your home, you do not have to start over building equity.
Loss of Use
Disaster can strike when you least expect it. If a natural disaster destroys your home, your homeowner’s insurance policy should pay to relocate you to safe shelter.
This “loss of use” coverage will reimburse you for hotel bills, meals, and other necessary living expenses. Most policies pay up to 20 percent of the coverage amount.
So, if your homeowner’s policy is for $100,000, the loss of coverage amount is around $20,000.
Protects Against Theft
There’s nothing worse than coming home to discover someone has broken into your home and stolen your things. Your homeowner’s policy protects you against robbery or theft.
Your policy will either reimburse you for the replacement costs or actual cash value. Be sure to keep an inventory of the items in your home, especially valuable ones.
Having a record of your belongings can make the process much easier in the event of a break in.
Liability Protection
Even if you think you could cover the cost of your home if something happens to it, you have to consider the liability issue. This involves someone getting hurt on your property and suing you.
Without homeowners insurance, you may be responsible for their medical expenses. Medical bills can add up fast.
Depending on the severity of their injuries, this could be devastating to your finances. And you could have a pile of legal bills as well.
If you’re still wondering why homeowners insurance is important, you have to consider the importance of liability protection.
Future Insurability
Many insurance companies will ask how long you have had insurance. They see someone who has maintained insurance for a period of time as more stable than someone who has not.
Insurance companies must balance risk. A working, stable person is at a lower risk than someone they feel is a higher risk client.
If someone has owned a home for a while without insurance and then suddenly wants insurance, it may appear suspicious. The insurance company may feel the person just wants to file a large claim.
They view instances like this as suspicious. You will improve your future insurability and save money by maintaining insurance for a long period of time.
Peace of Mind
Homeowners insurance has another benefit – peace of mind. You don’t have to worry about what will happen if a tornado strikes or if someone gets hurt on your property.
You never know what will happen in life, and you hope you never need your homeowner’s insurance.
But if you do need it, it’s a great feeling knowing it’s there to protect you, your home, and your belongings.
Do I Need Homeowners Insurance?
It is so important for homeowners to purchase insurance to protect their home and their belongings. You hope you never have to use your homeowner’s insurance, but bad things happen.
And when something bad does happen, you will be glad your insurance policy is in place to protect you and your family from financial harm. If you are asking yourself, “Do I need homeowners insurance?”, the answer is a definite yes.
With a good homeowners policy in place, you are better equipped to weather any crisis or storm that comes your way. If you need insurance, we can help.
We are happy to answer any questions you may have. Contact us today.
