House insurance can be an unwelcome cost, but it does protect your home. For most people, that means that it protects the largest asset that they have. Here are a few reasons why house insurance is a smart financial tool that every home owner should have.
House Insurance – Natural Disasters
Natural disasters can happen anywhere. You never know when a natural disaster may hit and leave your home in shambles. Those are the times when you will see the usefulness of house insurance. Homeowner’s insurance will pay for the repairs that are required after an emergency situation. It will cover the home up to the coverage limit you select so that you will only need to worry about your deductible if the worst happens. That could save you thousands.
In our case, hurricanes are a worry every year. A combination of homeowner’s insurance and flood insurance allows me to concentrate on worrying about the important things – my husband and my dogs. Everything else can be replaced.
House Insurance – Required by Lenders
Another reason why you need house insurance is that most lenders require it. Unless you pay for your loan in full, lenders use homeowner’s insurance as a way of protecting themselves against default due to damages. If you fail to pay your mortgage and allow the home to fall into poor condition, then home insurance may help cover the repairs. House insurance serves as a way of insuring the interests of the lender, which encourages lenders to keep offering home loans.
House Insurance – Protection from Theft
Burglaries happen. House insurance protects against the loss of possessions too. Homeowner’s insurance can cover the loss of electronics, jewelry, and other valuables that have been stolen from your residence. You will have to pay for the deductible and have proof of the items’ existence, but the insurance company can really help you after a robbery.
I have taken photos of all of the electronics and valuables in our home as well as general shots of every room and area to see all the little stuff too. I made sure to zoom in on the serial numbers too. I keep those pictures at my in-laws in case our house burns down or thieves take anything. Our insurance company covers our house for $150,000 and our possessions for $75,000, which is more than enough for us.
House Insurance – Limits Liability
One of the biggest advantages of house insurance is that it limits the liability of the homeowner. It could cost you thousands of dollars to replace items after a disaster like a fire. You may also be liable for any accidents that happen on your property. Homeowner’s insurance will kick in and cover all of these items up to their coverage limits once the deductible is paid. Deductibles can be as low as $500 or $1,000. Ours is $1000 for most situations and $3000 for wind damage from hurricanes. Deductibles stink but they are usually small prices to pay for the protection of your main savings.
What other benefits of house insurance can you think of?