Your home is possibly the single biggest investment you have made. Thus, you really need to insure it. This insurance is more important than ever because of the high risk of job loss or money market upheavals. These same economic problems have probably caused you to consider reducing the premium on your home insurance in order to cut your expenses, but is this approach really the best way to go?
Consider this statistic.
Studies have shown more people are opting out of flood damage coverage, as they seem “unnecessary.†Opting out of this coverage leaves you and your loved ones exposed to unimaginable misery in the event of an accident. This almost always results in huge bills for rebuilding or recovery that you must pay out of pocket in the event of severe damage or complete destruction of your home.
Why you need home insurance
The main reason to purchase home insurance is peace of mind for you and security for your family. Property insurance covers destruction or damage to your home and possessions. Thus, if an incident occurs, having a good policy goes a long way in mitigating the costs of rebuilding, moving or settling a legal case.
Another benefit of having property insurance is that it provides coverage in the case of injury to others on your property, including injury caused by you, members of your family or your pets. This coverage provides you with protection from liability and legal responsibility. This is crucial when it comes to paying for medical or legal expenses following an injury to a visitor.
Did you know that most mortgage companies require that loan applicants acquire and maintain home insurance for the duration of the mortgage?
Possessions such as expensive electronics and gadgets, jewelry and furniture can all be covered under home insurance. This is especially helpful if your property is stolen or damaged while in the home; the policy will reimburse you for the property’s value so that you can replace it. Note, however, that policies vary as to what property is covered, how much will be paid on claims and what types of loss are covered. You therefore need to be fully aware of the limits that the policy covers.
It is not enough to simply have insurance coverage for your property; you must keep policies and inventory lists up to date. In the event you don’t keep up with your payments, your insurance company may cancel your insurance, leaving you to foot the bills on your own should an incident occur.
Consumer advice
Shop around for the best providers available that will offer adequate coverage at a price you can afford. Before you purchase the policy, make sure you understand everything the policy covers. It’s also important to make sure you fully understand the claims processing procedure. Some companies make lump sum payments on claims for damaged property, while others make payments in installments.
Additional resources are available online, so keep an eye on the fine print and you will be okay. Keep in mind that the cheapest is not always best, but neither is the most expensive.
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