Buying a house can get expensive, fast. The median home price in the United States comes to about $230,000, but paying to buy the house isn’t the only expense you’ll face.
There are ongoing maintenance costs, unexpected repairs, and monthly expenses to cover. When the unexpected happens, do you have a plan in place to cover those expenses?
If you’re like most people, the thought likely stresses you out. Investing in a homeowners insurance policy can help, but do you need homeowners insurance to really look after your home?
Here are a few reasons that you definitely do.
1. Your Mortgage Company May Require It
When you take out a mortgage, the lending company is essentially investing in your home. That loan covers the cost of your house. You pay the loan amount plus interest in installments every month, but what happens if you can’t make those payments?
Well, the mortgage lender can take possession of the house. Since your house is what effectively backs the loan, your lender wants to protect it from damage.
The best way to do that is with homeowners insurance and they’re legally allowed to require you to buy insurance before you can get the loan in full. If your lender requires home insurance, they’ll tell you how much coverage you need to have and will outline the terms of those requirements in your loan agreement.
Just make sure you understand those requirements before you buy coverage. Buying too little or not buying it at all could get you in trouble with the mortgage lender.
2. Homeowners Insurance Protects You From Liability
Homeowners insurance coverage offers different types of protection, but the most important is liability coverage.
If someone gets injured on your property or another person’s property gets damaged by a tree limb from a tree in your yard, you’re liable for the damages. Depending on the severity of the incident, you could end up paying thousands out of pocket. Worse, you may also have to pay for court fees to reach the settlement.
Homeowner’s insurance helps pay for those damages up to the limits specified by your policy. This includes any court fees or settlements you might get ordered to pay.
3. Helps Pay to Fix Damaged Or Lost Property
Disasters happen all the time. Sometimes, they’re severe storms that damage your roof. Other times, a thief or vandal that steals your belongings and destroys your property. No matter what the cause is, you’re going to have to repair the damage in order for life to get back to normal.
Homeowners insurance helps pay for the damage caused by a qualifying event. In most areas, this includes storm damage, fires, broken pipes, and even theft.
Once you file a claim, your insurance provider will help pay for the cost of repairs and may be able to replace any stolen items even if the police don’t recover your originals. Just remember that the coverage is only good up to the limit of the policy.
Make sure you buy a large enough policy to fully cover the property you want to protect.
4. Protects You While You’re Away
Believe it or not, homeowners insurance doesn’t just protect your house and everything in it. It can protect your belongings while you’re away from home.
If you’re on vacation and something gets stolen, your insurance policy will help pay for the cost of a replacement. You may not be able to get that replacement while you’re away from home, but you won’t have to worry about paying full price after already spending money on a trip!
Every policy has different restrictions on this. You’ll want to review the coverage details before relying on your policy to protect you while you’re out and about.
5. Pays for Medical Treatments
As a homeowner, you’re liable if someone gets injured on your property. That liability goes beyond just court fees and settlements. It also includes medical treatments.
Depending on the severity of the injury, this could cost you thousands of dollars.
With a valid homeowners policy in place, your costs will be far less. Instead of paying the full cost of their medical treatments out of pocket, your insurance provider will help cover the treatment.
If that treatment costs more than the limits of your policy, you’ll only be responsible for the remaining amount.
6. Covers Temporary Lodging
Sometimes, damage to your home can be so extreme that you might not be able to go back to the house until it’s fixed. When this happens, you’re forced to find somewhere else to stay.
Without home insurance, the cost of that Airbnb, hotel, or short-term rental will come right out of your bank account. Worse, you’ll still have to pay for the cost of repairs to your home as well as the full mortgage amount you owe normally.
Home insurance helps cover temporary lodging while also paying for the repairs so you can get back into your house as quickly as possible.
7. Gives You Peace of Mind
Owning a house is stressful on its own. The last thing you want to do is worry about what might happen if your home gets damaged.
Home insurance can give you peace of mind so you can focus on the other more pressing issues relating to homeownership.
Do You Need Homeowners Insurance? Absolutely!
When you first buy a new house, it’s normal to wonder if homeowners insurance is worth the investment. After all, you’re going to pay for it as long as you own the house.
Though every person’s situation is different, the standard answer to, “do you need homeowners insurance?” is almost always, “yes.”
If you don’t have a policy already, get quotes from local insurance providers immediately. The sooner you do, the safer your home will be.
Looking for more helpful tips to keep your home in good shape? Check out our latest posts.