$78,838. That’s the average home insurance claim made after a fire or lightning damages a home.
The most common causes of home insurance claims are wind, hail, water damage, and fire. Unfortunately, you never know when your home will be the victim of one of these events.
You could choose to take the risk and live without homeowners insurance or manage the risks by protecting yourself with a home insurance plan. Managing these risks is simple to do by purchasing home insurance.
While it will cost some money to buy a policy, you’ll have the protection and security you need. There are eight great reasons to invest in a homeowner’s insurance plan, and you can continue reading if you’re ready to learn these.
1. Your Lender Requires It
Mortgage lenders have rules and requirements that borrowers must follow. One of these is that a borrower must keep home insurance on the property while the loan is still active.
Consider what would happen if a fire consumed your entire home while you owed money on your property. You’d lose your house but still owe money to a lender.
Lenders realize this and require home insurance for their protection. But, it doesn’t just protect lenders. It also protects borrowers.
In this example, your home insurance pays your lender the balance you owe on the loan. There’s no better way to manage your risks than purchasing homeowners insurance for this purpose.
2. It Protects Your Home
So, why do you need homeowners insurance besides to ensure that it pays your loan if you lose your house? There are many answers to this question. However, one vital answer is to have protection for your home.
If you don’t have a loan on your house, you might think you don’t need home insurance. But imagine losing your house to a fire without having insurance on it. You’d lose your entire investment.
If you wanted to rebuild your house, you’d have to pay for all the rebuilding costs. However, you’d receive compensation for your losses with home insurance, and you can’t get this compensation any other way.
3. It Also Protects Your Things
Home insurance doesn’t only cover your home’s structure, though. It also covers the things you own inside your house, including your furniture, appliances, and clothing.
For example, if you experience losses of your personal items, you can file a compensation claim. Your policy might compensate you based on the actual value of the goods or their replacement value.
You can learn more about home insurance costs by speaking with an agent. An agent can also help you choose a plan that provides all the coverage you need for your home and personal possessions.
4. Home Insurance Covers Lawsuits
What else does homeowners insurance cover, you might wonder? Does it cover other things? The answer is yes; it covers other things, including lawsuits.
You might not realize that people can sue you if they encounter injuries while visiting your home. For example, suppose a delivery driver slips on your icy sidewalk and breaks his leg. He could sue you for the damages.
Fortunately, home insurance policies come with liability coverage. Your policy covers the damages if anyone gets hurt or killed on your property. Again, you’d be personally responsible for these costs without insurance coverage.
5. Your Policy Covers Your Equity
Your home is an investment. You might not start with much equity in your house when you first purchase it, but you’ll gradually build equity over time. As mentioned earlier, living without home insurance puts you at risk.
If you lose your home, you lose your investment. As a result, you should take the appropriate steps to minimize your risks. The best way to do this with your home is through the protection of a home insurance policy.
6. You’ll Have Coverage for Many Events
Minimizing your risks is vital when you own a home, but what risks does a home insurance policy cover? A basic policy might cover the following events:
- Fire
- Hail
- Wind
- Water damage
- Smoke
- Fallen trees
- Vandalism
- Lawsuits
You can add extra coverage to your plan, too. For example, if you fear that a flood might destroy your home, you could purchase a flood insurance policy for added protection.
A home insurance agent can tell you what perils your policy covers, but they’ll also explain other perils you can protect through riders or additional policies.
For example, adding sewer line coverage is a common rider that homeowners request. If they experience damage from their sewer lines breaking, they can file a home insurance claim for compensation.
7. It Provides a Sense of Security and Peace
If you think about your risk-management goals, you might realize that having a sense of security and peace is one of the top ones. Finding ways to protect yourself is an excellent way to feel more confident and at peace.
When you know that you have the protection you need for all your risks, you can feel a sense of security. As a result, you’ll have fewer worries, which means you’ll have less stress.
8. Home Insurance Is the Best Ways to Manage Your Risks
Buying a home insurance policy is one of the best ways to manage your risks, mainly because a home is a valuable asset. Think about this. What position would you be in if you lost your home without insurance coverage?
If this thought scares you, it’s simple to ease those fears by purchasing home insurance.
Owning a Home Without Insurance Is Risky Business
Your home might very well be the most valuable thing you own.
Choosing to skip purchasing home insurance could put you in a very bad and risky position. Instead, you can manage the risks by purchasing a policy that fully protects you, your home, and your things.
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