Do you need homeowners insurance?
Well, that depends. Do you value your home and the things in it?
If you’ve been living under a tree with regards to homeowners insurance, it’s probably because a tree fell on your house and you can’t afford to pay for the damages.
If you’re not familiar with this concept, you’ve either been living on the edge all of these years or you’re new to homeowning. That’s okay — we’ve got you covered.
Next, we’ll give you a quick rundown of what homeowners insurance is and does, and the many reasons why you should have it.
This isn’t just another bill to pay. It covers you against any number of events that could happen to your home, in your home, and with the people in your home.
Here are the 10 reasons why you need homeowners insurance.
Do You Need Homeowners Insurance?
That’s the question at hand. We’ll tell you right now that the answer is a resounding “yes.”
It may seem like an annoying and expensive thing to have to pay every month, but as we’ll go over, homeowners insurance will protect you against a litany of problems that can arise with or in your house. In this recent post, you can view some advice on getting the best policy for your needs.
1) It Gives You Peace of Mind
Let’s start with an abstract concept. You’ll learn that having homeowners insurance will give you peace of mind.
Imagine a scenario where your house is broken into, all of your valuable belongings are stolen, and the robber drops a lit cigarette when he’s leaving, causing your home to go up in flames.
Obviously, this would be devastating no matter what, but compare in your head the level of devastation if you had homeowners insurance vs. if you didn’t.
Peace of mind may not seem valuable to you if you’re having trouble paying the bills, but we’ll go over a few scenarios in the subsequent sections that will change your mind.
2) Protects You Against Damage
Your homeowners’ insurance plan will protect you against loss in the event of a natural disaster or a fire wreaking havoc on your home. Basically, anything that isn’t caused by a manmade problem is covered.
That means that you’ll be reimbursed the value of the damage caused by the accident, regardless of the cost.
You can’t predict what kind of weather or freak occurrences will happen. By getting homeowners insurance, you’re protecting yourself against huge potential expenses.
3) It Protects Your Stuff
A homeowners insurance plan will also reimburse you the value of your personal belongings. Anything lost can be paid in cash value or replacement cost depending on what features your plan has.
Your monthly fee will be higher, but if you have replacement cost coverage, you’ll be reimbursed the cost of replacing the items lost.
If you want to retain the market value of the items lost, get cash value coverage. This will give you the same amount as you’d get if you sold the lost item, and it’s cheaper within the plan.
4) Protects against Robbery
Homeowners insurance doesn’t only protect against freak accidents, it protects against burglary too. 4,800 American homes are burglarized every day, but with insurance, you can get back the value of your things.
As mentioned previously, you can either get replacement cost coverage or market value coverage. They work the same way with robberies as they do with damages.
Take inventory of everything in your house and make note of its value when setting up your homeowners’ insurance plan.
5) Protects Equity
If something happens to your house, your home insurance plan will make sure your equity is unaffected.
A house is one of the biggest investments that a person can make, so a disaster shouldn’t affect the value that you’ve built up over time by paying your mortgage.
6) Protects against Lawsuits
If someone is injured on your property, your homeowners’ plan will protect you against any lawsuits that may occur.
It will also cover the damage to your property and the legal fees that you may incur because of the incident.
7) Gives You Interim Housing
In certain cases, the damage from a natural disaster can be so severe that the house is temporarily unliveable, or worse, damaged irreparably.
If your house has to undergo major repairs because of a natural disaster, there will be coverage in place to have you put in a hotel while you sort out what to do next.
8) Other Structures
If the damage spreads to other structures on your property, your plan will cover those too. This is called an “Other Structures” policy and may include barns, sheds, and fences.
9) Pays Medical Bills
If you or anyone is injured in your house or because of a natural disaster or otherwise, those medical bills will be covered by your homeowners policy.
These may include X-rays, scans, ambulance rides, and even surgery.
10) Your Moneylender May Require It
The simplest reason that you may need to get a homeowners insurance plan is that your mortgage lender might require it.
If you think of it from their perspective, your resistance to getting an insurance plan for your home would mean that their investment is unprotected. Either they’ll avoid giving you a home loan, or you’ll have to suck it up and get the insurance.
If you can’t afford a policy covering the cost of your mortgage, it’s common for banks and mortgage lenders to use “forced coverage.” This is not the way that you want to go as these policies are extremely expensive and only look out for the interest of the lender.
Don’t Sleep on Homeowners Insurance
Since most states don’t require it, people try to avoid homeowners insurance. It acts as a preventative measure to protect your investments, but it’s less of an abstract concept when something actually does go wrong.
Do you need homeowners insurance? We think so, but you’ll have to make the final decision on your own.
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