A person’s home is their most important possession, so it’s important to have it adequately protected by having home insurance. While home insurance is not legally required like automobile insurance, the vast majority of homeowners have it to protect them in the event an accident or other unexpected happening occurs. In addition to this, there are several other reasons why it’s important to have home insurance.
Protection of Property
Different parts of the policy cover losses related to the home. If the home itself is damaged, the dwelling coverage part of the policy will cover the cost of any repairs. If for any reason you can’t live in your home due to the sustained damages, the policy will pay your rent if you need to stay at an apartment or rental home while repairs are made. If personal belongings in the home are stolen, destroyed or damaged the personal property section of the policy will pay for their replacement or repair.
Many people fail to realize that before they can finalize the purchase of a home, they are required to purchase homeowner’s insurance as part of the deal. According to Anthony Clark Insurance Ltd., the amount of insurance purchased must be enough to cover the amount of the mortgage, ensuring the property is covered in the event something happens. If the policy is cancelled or allowed to lapse by the homeowners, the lender is allowed to purchase insurance and bill the homeowner for the cost, which can be considerably more than they were paying. These are called force placed policies, and cover only what the lender has invested in the home, not the owner’s personal property or equity.
Home insurance protects the owners if a visitor or other person on the property is injured. This most often pertains to such things as falling or getting bit by a dog, and can potentially result in the owner being sued. If this happens, the insurance company will either pay for the cost of hiring an attorney or provide one for the homeowners if needed. According to statistics, one-third of liability claims are for dog bites, with the average settlement approaching $25,000. Without this insurance, a homeowner would be responsible for paying this amount themselves.
Insurance is often thought of as something that is never needed, but when it pays for a new roof, new television or helps settle a negligence claim it is a financial tool many homeowners are very happy to have.