Why You Need Homeowners Insurance
If you own a home, you need to have homeowners insurance. In an emergency, your roof could collapse or fire could ignite, taking with it your clothes and other valuable possessions. As an owner, you have a legal obligation to take reasonable precautions to keep your home safe. That is why it is important to have the right kind of homeowners insurance. Here are a few reasons why you should consider purchasing homeowners insurance.
Home insurance may be mandatory: In some cases, home insurance may be mandatorily required. For instance, if you bought your home on a mortgage, your lender may require you to have home insurance with sufficient coverage. This helps the lender ensure their investment in your home does not get affected. If you don’t have home insurance, the Consumer Financial Protection Bureau allows your lender to purchase the insurance plan on your behalf and charge you for this. However, keep in mind that the insurance plan your lender purchases may be more expensive than what you would find on your own.
Home insurance protects more than just your home: While a standard home insurance plan helps protect your home, it usually covers more than just the physical structure. From independent structures located on your property to your personal possessions and medical bills if someone happens to get injured on your property, a home insurance plan will cover the resulting expenses.
Covers your living costs: If the home you currently reside in becomes uninhabitable due to a covered loss, such as your roof caving in, most insurance providers will cover your alternate living costs. Given how expensive it can be to find alternate accommodation on short notice, your home insurance plan can benefit you significantly.
Home Insurance Limits and Deductibles
It’s important to remember that different types of home insurance plans have varied coverage limits – so it is important that you assess the potential cost to rebuild your home and replace your belongings and choose the right type of plan, regardless of what the cost is.
Further, keep in mind that home insurance plans have deductibles. A deductible is a certain sum of money that you need to pay before your insurance benefits can kick in. Opting for a high deductible will lower your premium but increase how much you have to pay, and vice versa, so choose your deductible after careful consideration.