Most homeowners undermine the importance of homeowners insurance just because it is not compulsory. The fact is that if things going south, this protection coverage will help them cover the expenses instead of having to pay out of their own pockets?
Continue to read if you want to know about the drawbacks of not having homeowners insurance.
5 Drawbacks of Having No Homeowners Insurance
While you are under no obligation by law to buy homeowners insurance, not having homeowners insurance can expose your home to several risks. Here is five of the most critical disadvantage of having no homeowners insurance.
1. Ineligibility to Secure Mortgage
Are you currently seeking approval to get a mortgage? In that case, once the lender preapproves your mortgage request, they will require a variety of documents. One of these documents is proof of having homeowners insurance.
This is for lender’s peace of mind to ensure that their investment will be safe and covered in case of any damage to the property. Having homeowners insurance becomes even more important if you are a resident of a high-risk area for floods, hurricanes, and earthquakes.
Sometimes, a lender may purchase homeowners insurance on your behalf and charge you for it along with your mortgage premium.
2. Your Home Has No Coverage
Think about leaving your home vulnerable to damage and loss, especially if the conditions are not in your control, such as natural disasters, fire, or theft.
Additionally, as you live in your house, it is prone to wear and tear over a certain period of time, such as leaks, cracks on the walls, roof giving way, etc. Having no insurance will leave your home and its structure without adequate protection
3. Paying Expenses Out of Your Own Pocket
While you might think that paying a monthly premium is an unnecessary expense, it can help you save thousands in case of damage or loss. If you choose not to buy homeowners insurance now, you will have to bear all repair and maintenance expenses for years to come.
In case of severe damages or loss due to fire, floods, or other factors, this cost can spike to thousand if not millions. The worst part is that having no access to insurance coverage will leave you with no option but to pay for it yourself.
4. Vulnerable to Lawsuits and Other Liabilities
Did you know that if a guest or even a trespasser sustains an injury on your property, you will be liable to pay for their medical bills? Yes, and the worst part is that you will also be legally responsible if they file a lawsuit against you.
On top of that, you will have to hire an attorney to defend your case. To cut it short, you are looking at a mountain of debt for many years to come.
5. Defaulting on Your Mortgage is not an Option
If you are getting a mortgage, nothing is wiser advice than to buy homeowners insurance coverage. This is essential because if you fail to pay your monthly insurance premiums for any reason, the mortgage coverage lapses, and the lender may contact you immediately demanding immediate payment.
In case you cancel your homeowners insurance at any point during your mortgage term, you violate your mortgage contract with the lender. Depending on each lender’s terms, they may even move for immediate foreclosure. However, most lenders would ask you to get homeowners insurance before moving in for possession of the property.
Tips to Find the Right Homeowners Insurance
Now that you know why you must buy homeowners insurance, here are some useful tips to help you start.
- Determine your needs by making an extensive list of assets you wish to include in homeowners insurance coverage. You can hire an appraiser to get an accurate value of your home.
- Know your budget, i.e., how much you are willing to spend on monthly premiums. You can lower your premiums by agreeing to pay a higher deductible when making claims.
- Gather as many quotes as you can from various insurance providers and start comparing. Remember that the aim is not to choose the cheapest but the one that offers the most extensive coverage with maximum limit within your budget.
This post summarizes that you must buy homeowner insurance if you wish to protect your home and belongings. While not purchasing the coverage may sound like the best financial option right now, you may end up paying a huge amount of money in case of extensive damage or loss.
Moreover, saving money on homeowners insurance may result in you losing the home as the lender moves in for repossession. If you need unbiased advice on buying homeowners insurance, feel free to contact Velox Insurance.
They will discuss everything in minute details, and with Velox Insurance, you can get an online quote in 60 seconds and purchase the coverage online. You can also buy with an agent and over the phone.