The majority of homeowners in the U.S. (about 95 percent) report paying for homeowners’ insurance. A small portion, though, has questions about the necessity of this extra insurance.
Are you part of this group? Do you have questions like “Do I need homeowners’ insurance?” or “Is homeowners’ insurance really worth it?”
Read on to learn more about seven reasons why homeowners’ insurance is important and why everyone ought to have it.
1. Mortgage Lenders Require It
First, if you’re working with a mortgage lender to buy your home, you’re required to have homeowners’ insurance.
Since most people don’t have enough cash lying around to buy a home outright, you’ll likely need to take this point into account if you’re getting ready to buy a house. If you invest in a homeowners’ insurance policy now, you can satisfy your lender’s requirement and speed up the process of buying your home.
2. Loss Protection
Let’s say your home is hit by a natural disaster at some point. This could be a fire, a flood, a tornado, or even a lightning strike.
Mother Nature might decide to do some damage to your home, but homeowners’ insurance can help to offset that damage.
When your home is insured, it’s easier to cover the cost of the necessary repairs and replacements. Homeowners’ insurance also helps you repair your home if it’s vandalized.
No homeowner wants to think about something terrible happening to their house. You never know when things could go wrong, though, and it’s better to be safe than sorry.
3. Protect Personal Belongings
Homeowners’ insurance doesn’t just protect the house itself. It also protects your personal belongings, such as electronics, appliances, clothing, and furniture.
If someone were to break into your house and steal something of value, your homeowners’ insurance policy would help you cover the cost of the missing items so you could replace them.
Keep in mind, too, that homeowners’ insurance protects your belongings even when they’re not in your house. For example, if you were traveling and someone stole your laptop or a piece of jewelry, you could still likely have it replaced under your insurance plan.
4. Liability Protection
Let’s say someone gets hurt on your property. Maybe a friend or family member is visiting and they trip and fall, for example. Depending on how litigious that visitor is, they might decide to file a lawsuit against you to help them cover the cost of their medical care following their injury.
If you don’t like the idea of being left defenseless should someone try to sue you, homeowners’ insurance is a must. It’ll help to cover the cost of thins like legal and medical fees, as well as lost wages for the injured person.
5. Access Temporary Housing
In the event that the damage your house undergoes is severe and prevents you from staying there during the repair process, you’re going to need access to temporary housing.
The idea of sleeping over at grandma’s house appeals to some homeowners, but it would also be nice to have a place of your own, wouldn’t it?
If you have homeowners’ insurance, it’ll be easier for you to find a place to stay while your house is repaired, and the insurance company will pay for it. They’ll also help to cover additional expenses, such as the cost of food or dry cleaning.
6. Protect Home Equity
Many people don’t realize that homeowners’ insurance also helps to protect their home equity.
If something happens to the home and you have to rebuild or repair it, you won’t have to worry about losing the equity you’ve accrued since purchasing it. You won’t be starting from square one when it comes to building up the value of your property
This can be a huge relief, especially if you’ve lived in your home for a long time when a disaster strikes.
7. Peace of Mind
Finally, homeowners’ insurance gives you peace of mind. You can rest easy knowing that, if something were to go wrong, you’d be able to rebuild without having to pay for all the repairs or replacements yourself.
Remember, buying a home is a big investment, and you should do whatever you can to protect it. That includes investing in a good homeowners’ insurance policy that provides you with all the coverage you need.
Tips for Choosing the Right Insurance Policy
As you can see, homeowners’ insurance is pretty important. It can also be pretty overwhelming, especially when you start looking around for the right insurance policy.
There’s a lot to keep as you compare and contrast different policies. These tips can help you sort through your options and find the best one:
- Learn the insurance company’s rating (the higher the score, the better they are at taking care of their customers and following up on claims)
- Consider the location of your home and how it affects insurance rates
- Look for discounts for things like extra security features or being a new homeowner
- Get quotes from several companies for easier comparison
- Make sure you understand the deductible before selecting a plan
- Get clear on what each plan does and doesn’t cover
The experts who sell State Farm home insurance also emphasize the importance of knowing your home’s history. This includes past insurance claims and past problems like flooding.
Having this information available will help you get the most accurate quote possible and ensure you don’t run into any unpleasant surprises later.
Do I Need Homeowners’ Insurance?
Homeowners’ insurance is well worth the cost and will give you peace of mind knowing you won’t be left in the lurch if something goes wrong.
Now that you have a clear answer to the question “Do I need homeowners’ insurance” are you ready to get your home insured? Keep the tips listed above in mind so you know where to start when shopping for an insurance policy.
We have lots of other helpful resources on homeowners’ insurance available on our site, too. Check them out today to find the perfect policy for your needs.