do you really need the extra insurance?

Unsure Of Getting Homeowners Insurance? 3 Reasons To Get It

by Rick Mcguinness

Your home is a significant investment where you should make memories. Homeowners insurance remains a vital though an underutilized form of insurance for homeowners. So, if you are unsure of whether to get homeowners insurance, here are three compelling reasons to get it.

Protect Your New Home from Natural Disasters and Other Calamities

As a homeowner, it is your responsibility to ensure your home and property is safe against threatening factors like weather, fire, and vandalism. Irrespective of the damage to your home, homeowners insurance ensures you remain covered should any calamity affect your home. Thus, it helps save money should unexpected circumstances occur.

Additionally, most homeowners insurance policies provide extra living expenses coverage if your home is rendered uninhabitable after a catastrophic event. With the coverage, you can cover temporary living costs as your property continues to undergo repair as you continue searching for alternative means of shelter. Depending on your policy, you might also get reimbursed for the loss of personal belongings like clothing and furniture.

Know Your Liability and Get Essential Allowances

Homeowners insurance policies cover more than structural issues. The policy also offers protection in case of any lawsuit that occurs after injury to your property. For example, assume your neighbor's child decides to visit and takes a dip in your pool, and by bad luck, they get hurt after slipping on your deck. According to the law, you would be held liable for negligence.

Fortunately, if you have taken a homeowners insurance policy, the policy can help meet medical bills, lost wages, and legal fees. Furthermore, the insurance helps maintain your home's equity. When you make changes and renovations that increase the value of your home, the insurance helps showcase these improvements as an investment.

Use It to Obtain Your Mortgage

After deciding to take on a mortgage to own your home, most lenders will ask you to get homeowners insurance. The policy acts as security for the house for the lender who finances you. Your lender needs to reduce the risk they suffer by financing you. Therefore, they need to be sure that your home is well insured as it is a financial investment they are offering you.

Besides homeowners insurance, the company you borrow funds from might need additional insurance depending on where your ideal home is located. For example, if you are considering buying a home in a flood-risk area zone, you might need additional insurance for the home.