In our lives, we make several expensive investments to secure our future finances. But, seldom, these investments can face the perils of natural disasters or someone else’s negligence. And during these times, insurance can come to the rescue.
One such protection is Homeowner’s Insurance.
What is Homeowner’s Insurance?
As the name suggests, the insurance policy protects the homeowner from unexpected expenses. To put this into perspective, consider this situation.
Someone breaks into your home and loots you of your precious jewelry. Yes, we know it is disheartening. But, read this – with the help of a homeowner’s insurance you can get your home repaired, notched up with new security systems, and even replace your jewelry.
Isn’t it great! We know, the prospect of protecting your possessions and belongings financially seems exciting. On top of this, homeowner’s insurance can also protect you from liability expenses.
If someone gets injured on your property, legally, you’d be liable to pay for the medical and rehabilitation expenses. There could be several other compensations to be paid too, but discussing them right now, is not in the scope of this article.
Nonetheless, your insurance policy should cover this liability cost as well. Thus, providing you with complete peace of mind.
A homeowner’s insurance policy is meant to protect the homeowner from liability, repair, and replacement expenses, in unfortunate instances.
Why do you need it?
It is noteworthy that there is currently no legislation that mandates having homeowner’s insurance. However, it does not classify the coverage as a luxury. The following reasons should convince you to consider it rather a necessity.
Compensation for Structural Damages
One of the key features of homeowner’s insurance is that it covers the cost of home renovations. Depending upon the extent of your policy coverage, you can expect your insurer to pay for remodeling and repair projects.
For example, if your home is destroyed during a natural calamity, such as an earthquake or a hurricane, your insurer would pay you for the repairs. And with extended coverage, you can even expect your insurer to pay for the remodeling of your home at the same time.
Helps with Mortgage Approval
Though there are no laws that mandate buying homeowners insurance, there are certain instances that require you to have one. As it mentions here, https://www.lopriore.com/homeowners-insurance/, mortgage lenders often make it mandatory for homebuyers to get insurance. This is to ensure that in case you default with the repayments of your loan, the lender can recover the mortgage amount.
Besides, having homeowner’s insurance also helps improve your credibility. It means, you can also secure other forms of loans, including personal loans, that may require you to place collateral. And in case, it happens so, you can use your insured home against the collateral.
Replacement of Contents of your home
Your homeowner’s insurance not only protects the external or the skeletal structure of your abode but also the contents inside. It includes all your electronic and electrical appliances. Along with that your furniture and fixtures are also covered under the insurance.
It is noteworthy that your homeowner’s insurance can also cover expensive possessions. For example, your diamond or gold jewelry and that billion-dollar artwork hanging by the wall. However, it is also noteworthy that you’d need to buy additional coverage for these expensive possessions. Generally speaking, the standard policy does not cover jewelry and art pieces but only the essentials.
Covers Third Party Liability
As already mentioned, your insurance policy would also cover any liability claims. However, there’s more to it. For example, if you were to face a personal injury lawsuit, it would not only be about the injuries and medical expenses.
Extensive liability coverage can offer to cover the expenses for legal trials as well. It should include the fees for the personal injury lawyer, court fees, and other legal expenses. All these covers are in addition to the liability claim that you’re likely to compensate the plaintiff or the injured party.
Fire Accidents and Flood Protection
Seldom the damages to your property could be accidental. In other words, the damages could be because of the reasons you don’t have control over. For example, a power surge may cause a short circuit, which might start a fire. Or your home could be in a flood-prone region.
In such cases also, you can expect your insurer to pay for the damages. However, these special covers come at an additional premium. It is noteworthy that for properties in flood-prone regions, the coverage against flooding damage comes as a standard.
Loss of Possession Reimbursements
You must be wondering that while your insurer would cover the expenses of repairs and replacement, what about the costs that you bear due to the repair work. To put this into perspective, let’s take an example.
Say, you were to rent an apartment or a hotel room for a few weeks while your home is being repaired. At first glance, it may seem like these additional costs are bearable by you only. Not necessarily, though. Yes, you read that right. Your insurer can also pay you for moving-out expenses. But, they’d need to be reimbursed at the end of the repair project. Till then, you’d need to pay for the bills, out of your pocket.
How to buy the Right Insurance Policy?
So, by now, you should be pretty convinced of the validity of homeowner’s insurance. But, this is not it. Since you must already be planning to buy a policy for your home, you must also know how to find the right policy.
To begin with, buying an insurance policy for your home is quite similar to the process of buying a new car. You explore your options, validate which one’s better suited for your needs, and falls within your budget. And then finally, make the purchase.
The same goes for buying homeowner’s insurance. You’d need to find the plans that your budget can allow you. And then you shortlist them on the basis of coverage extension and other features. In the end, you should buy the best deal, anyhow.
On this note, we hope that this article has helped you with the information you were looking for. Please let us know your thoughts in the comments section below.