Why Do I Need Home Insurance?

Why Do I Need Home Insurance?

A new home can be the biggest purchase of your life; but consider this: You budget to furnish your home. You house all your belongings there. It is where you live, raise your family, and make memories. Following this train of thought, your home becomes a great financial (and personal) investment, so why not protect it? Home insurance is the safety net that helps you repair, rebuild, or replace that which can be susceptible to numerous risks.

It is often required by your mortgage lender

If you need a loan to purchase a new home, most lenders will require you to purchase home insurance (before closing). This protects the lender if your home is destroyed by a fire, tornado, or other hazard. Why does the lender need security? The lender gave you a large sum of money with the agreement that you would pay it back. Your home serves as collateral in the event you are unable to pay your mortgage. When your loan enters default, the lender has the option to repossess and sell your home to recover their losses.

Now, if your home is leveled by a disaster, the threat of foreclosure is less intimidating when there is no physical structure for the lender to repossess. Your lender will expect you to keep paying the mortgage though, whether or not the house is still standing. Your insurance policy can then protect you from paying the mortgage on a dwelling that is no longer livable. So, when shopping for a policy, keep this in mind: your lender often requires you to have at least enough coverage to cover your mortgage amount; but you might consider buying additional coverage to protect your own interests.

It protects your home, other structures, and belongings

Home insurance (or homeowners insurance – they are the same) can cover your home and other structures (whether they are attached to the home or separate), such as your garage, garden shed, deck, or guest house. If a tree falls through your roof during a windstorm or lightning strikes fire to the pool house, your policy can help cover the cost of repair. Most hazards are typically covered, including thunderstorms, tornadoes, hurricanes, and vandalism. Often times, though, flood and earthquake coverage are separate policies at an additional cost.

Home insurance can also help you if your personal belongings are damaged or stolen. Material items typically covered include furniture, electronics, appliances, and clothing. You may need to purchase additional coverage for jewelry, furs, and artwork, since those items have greater monetary value.

It covers living expenses if your home becomes uninhabitable

The cost to repair and rebuild your home is one thing, but what about the cost for temporary housing? If your family must live away from your home for a time, the additional living expenses can quickly add up. Homeowners insurance often includes coverage for a hotel or interim housing, as well as food, laundry, and storage space. Keep in mind that the event which rendered your home temporarily unlivable must be considered a covered loss. Also, there will likely be a cap on the amount covered and a time limit on how long your policy covers temporary housing.

It includes liability protection

Accidents happen. If a visitor sustains an injury on your property, your homeowners insurance (if it includes liability coverage) can help cover the costs should the injured party seek compensation. This can be their medical bills or lost wages (should the injury cause them to miss several days of work) and even legal expenses if they decide to sue you.

Liability coverage also protects you in the event you (or your family) unintentionally damage someone else’s property. For example, if your son is playing baseball in the front yard, and his home run sends the ball through your neighbor’s closed window, you are likely responsible for replacing it. Another more severe instance may be if you left the grill on, and it catches fire to your neighbor’s property; you are responsible for damages. In either scenario, your homeowners policy can help you with ensuing costs.

It helps you avoid large financial hits

Because your homeowners policy is designed to (1) cover the costs to repair, replace, or rebuild your property, (2) reimburse you for associated living expenses, and (3) help you with liability, you stand a better chance of remaining financially stable following an incident. This means you can potentially avoid or minimize unwanted debt or loss of credit, which can happen if you are left to pay for such losses on your own. This then ties into the last benefit of home insurance which is…

It gives you peace of mind

Knowing you are financially protected from most hazards because of your homeowners policy should be a huge relief. You may have a lot else to focus on – perhaps a mortgage, an upcoming engagement, or saving for next year’s summer vacation; so, would it not be better to have some security should the unexpected happen to your greatest investment? Less stress and worry add up to a better homeownership experience.

Shield Home Watch provides professional home services to all of Manatee County (Bradenton, Lakewood Ranch, Anna Marie Island, etc.). We are a family owned and operated local business and lived in the area for over 5 years. Our complete range of home services includes Home Watch, Housekeeping, Concierge Services, Key Holiding Services, and Rental Property Management. To learn more about Shield Home Watch or to schedule a free Whole Home Survey or service call, please call us at (941) 735-4405. If you would like to book an appointment 24 hours a day please visit our booking site.