Are you a first-time homebuyer who wants to know why you need home insurance? Maybe you are a current homeowner thinking if having home insurance is really worth it?
If you are nodding in affirmation to either of the above questions, then you are in the right place. This post is going to answer why homeowners need insurance. So let us dive right in.
Whether you are an existing homeowner or someone about to buy one, you must never underestimate the value of insuring your home. Your home sweet home will probably be your most valuable asset; therefore, you must do whatever it takes to secure it against any unforeseen damages and accidents.
This is where homeowners’ insurance comes into play because it helps protect your investment in more than one way.
Why Homeowner Insurance
In many cases, homeowners insurance is nothing short of a savior. For example, you have an ongoing mortgage; the lending institution will most likely want you to buy home insurance to secure your property against any damages. This will ensure the lender that their investment is safe in case you are unable to meet their payment terms.
Before refinancing your existing mortgage or approving your new mortgage application, the lending company will ask you to provide proof of insurance for the new property. Failure to provide proof of homeowners insurance may result in the refusal of your application.
However, the insurance terms and conditions may differ based on several conditions. For example, your lender may also ask you to provide added insurance on your home instead of simple homeowners insurance.
For example, if you live in an area with a history of vandalism or with extreme climatic conditions. In this case, the lender may ask you to get comprehensive home insurance to cover the damages caused due to theft, break-ins, and bad weather conditions.
Another example if you are living in an area declared as a high-risk flood zone; in this case, you will need added flood insurance for your home.
According to the Consumer Financial Protection Bureau, if you (as a homeowner) do not have any insurance policy, the lender can purchase insurance and charge you the price.
6 Ways Homeowners Insurance Helps
While a standard insurance policy may protect your home, it will only be able to cover the structural damages to the home. If you wish to have comprehensive insurance that not only covers the physical structure of your house but also the belonging on your property, then you need proper home insurance.
Did you know that some home insurance may even cover your medical bills in case a guest staying in your home gets injured?
That said, here are some of the advantages of having adequate homeowner insurance.
· Covering the Structural Repair Cost
Check if your insurance policy offers you”other structure coverage.” This will help you to pay towards the repairs of detached structures on your home property. This includes sheds or fences that may sustain damage due to an accident, fire, or weather conditions.
· Helping with Repairs
In case you are a homeowner of a property with attached structures such as a garage. The dwelling coverage of home insurance will cover you for any damages and pay towards the repairs.
· Replacement of Certain Belongings
Your insurance may allow you to replace certain assets and belongings such as electronic appliances and furniture, in case of theft or irreparable damage.
· Covering Your in the Uncharted Territories
Let us suppose your home sustained severe damage due to fire, flood, or a hurricane; what are you going to do? Well, if your homeowner’s insurance offers you “additional living expenses coverage,” they can cover your costs to live somewhere else temporarily, such as at a hotel.
· Protecting Your Guests
In case you have a visitor at home, and they sustain an injury at your property. The guest medical protection component of your homeowner insurance can cover your guests’ medical bills.
· Covering Damage to Other’s Property
What if you cause damage to someone else property? Well, do not worry because your insurance can have you covered as a homeowner.
For example, suppose you accidentally damage someone’s property or injure someone by mistake. In that case, your home insurance’s personal liability coverage component can help pay toward the medical bills, legal fees, and/or associated repair costs.
Things to Remember
No matter how good a home insurance deal you have, remember that they all come with limitations. Moreover, every time you wish to use your homeowner insurance, you may have to pay a deductible.
A deductible is basically an amount you have to pay before the insurance policy kicks in to cover your losses. Therefore, be sure to consider your potential deductible when selecting the type of coverage.
A homeowner insurance policy is essential protection for your home against any unforeseen accidents or damages. If you are unsure what type of home insurance may be suitable for you, you can always seek assistance from an insurance agent at VeloxInsurance.