Here Is Our List Of The 10 Reasons Why You Should Purchase Homeowners Insurance
10: To Please The Mortgage Lender
Homeowners insurance is not mandatory in numerous states. However, most banks and mortgage lenders would prefer you have insurance. Insurance will protect the lender’s investment in case the house becomes damaged. Lenders usually want homeowners to have enough insurance to cover the total amount of the mortgage.
If, for some reason, you are not able to purchase insurance, the mortgage company or bank will give you a policy called forced coverage. Try to buy a homeowner’s policy yourself. Forced coverage policies are tremendously expensive and only protect the interests of the mortgage company, not you, your family or your contents.
Also, stay on top of your premium payments. If you happen to let your insurance lapse, the mortgage company will insure the home for you. The lender can make you pay the higher premium until you get your own homeowner’s policy.
9: It Protects You from Lawsuits
Homeowners insurance can protect you from a lawsuit if someone is injured while on your property whether it is from a fall on your driveway due to icy weather or from a bite from your dog.
A classic homeowner’s policy protects you against a lawsuit if someone is injured while on your property. While most policies provide up to $100,000 in limited liability insurance, you can buy additional protection. Liability coverage will pay the injured individual’s medical bills and damages to the property. Insurance will also cover the fee for an attorney to help defend you in a court case.
8: It Protection from Loss
Homeowners insurance will pay to fix or replace your house if it is ruined or damaged by incidents such as a fire, tornado, hurricane, or most any other type of natural (except floods) and man-made disaster. Remember when you are buying a homeowner’s policy, you will need enough coverage to replace your house and your contents. About 75% of U.S. homeowners do not carry enough insurance on their home.
Dwelling protection will pay for damage to the main house and any other buildings, like an attached garage. It will also pay for damage to plumbing, electrical wiring, heating and installed air conditioning units that are permanent. A homeowner’s policy will also pay for damage to fences, sheds, guest houses and other structures on the property, including a detached garage.
7: Replace Your Possessions
If your possessions are ruined, do not worry, insurance will reimburse you for the value of your property which includes your appliances, furniture, clothing and other things. What’s great is those belongings do not have to be inside the house. They can be held in a self-storage locker, or even with your child at school.
Many policies give you a choice on how you can insure your possessions. You can get actual cash value or replacement cost coverage but what is the difference between the two? Most belongings will depreciate over time. Actual cash value will allow you to recover the amount that you expect to get if you sold the items, minus the depreciation. Replacement cost coverage allows you to replace your insured personal property for what it would cost to buy them if they were brand new. Replacement cost coverage is more costly than actual cash value coverage.
Remember that most companies provide personal property coverage up to 70% of the amount of insurance you have on the structure. If your house is insured for $100,000, then you should be insured for up to $70,000 worth of personal property coverage.
Here are a few of guidelines when buying homeowners insurance. First, know the value of your home so you know how much insurance to purchase. Also, check into how quickly the insurance company will pay on claims. You do not want to be waiting several months for a check.
6: It Pays Medical Bills
Let’s say a friend is walking up the driveway and they slip on a rock and break and a leg. Although they do not want to take you to court, the insurance company will pay for their medical bills. Guest medical coverage is built-in in most homeowner policies. Insurance will compensate for anyone who is hurt on the property in an accident not covered by the general liability portion of the policy. The insurance company will pay for such things as X-rays, surgery, an ambulance ride, and hospital stay.
5: It Protects Equity
For the majority of us, our home is the largest single investment we will make in our lifetime. Homeowners insurance will protect the equity in your home. Equity is the worth of a piece of property over and above any mortgage or other liabilities linking to that property. If you make restorations to your home, the equity in your property rises. Homeowners insurance makes sure if something happens to your home, you will not have to start building equity all over again.
4: It Protects Against Natural Disasters
Damage from natural disasters like tornadoes and hurricanes can be terrible, and homeowners rely on their insurance companies to help rebuild.
Whether it is an unexpected windstorm, or tornado, homeowners insurance will pay for the repairs, even if the house or its adjoining structures were ruined. However, some natural disasters, like earthquakes, require special policies. Furthermore, flooding is not covered in most homeowner policies. Instead, you must buy flood insurance separately from the federal government’s National Flood Insurance Program.
3: The Loss of Use
If your home is destroyed, or is so damaged that you have to stay somewhere else, a standard home insurance policy will pay to relocate you. “Loss of use” coverage repays you for hotels, meals and any other living expenses. Most insurance companies will pay up to 20% of the coverage price for loss of use expenses. For example, if your house is insured for $200,000, your loss of use coverage is about $40,000.
2: It Can Protect Against Robbery and Theft
Your homeowner’s policy will repay for belongings stolen during a burglary, so it does not hurt to keep a record of the higher priced items in your home.
To make the claims process runs smoothly, record all of the more expensive items in your house. You will not only want to document them on paper, but also take pictures and save receipts. I do not recommend putting the inventory on a computer since that too could be stolen.
1: To Have Peace of Mind
Peace of mind is the main advantage of having homeowners insurance. Overall, homeowners insurance is necessary. Hopefully a natural disaster will never tear your attic to shreds, and a tree will never fall through your living room roof. But if it happens, you will be happy you have insurance.
Remember, insurance companies are not doing you any favors. They actually do not want to pay. Often, they will hedge, they will hesitate and they will say your contractor is a scammer. Remember that it is your money. If you feel like you are being wronged, call your state consumer protection or banking and insurance agencies.