A home is one of the most valuable assets for any individual. More than being a financial asset, your home offers a sense of belonging and safety. Naturally, you’d want to do everything to keep your home safe. Home insurance ensures that.
Home insurance is a critical backup just in case things go wrong. Home insurance will have your back if something unexpected like a natural calamity or unintentional fire breaks out. But, many people feel that home insurance demands a bothersome investment. Like many others, you might be skeptical about the benefits and importance of having your home insured.
This article speaks about the importance of home insurance and much more. We’ve listed every minuscule factor that makes a home insurance policy a critical investment. So, if you are confused if home insurance is worth it, give this article a read!
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8 Reasons Why Home Insurance is Important For You
Many homeowners overlook the importance of insuring their homes. But, in case of emergencies, natural calamities, and other unforeseeable situations, home insurance comes in handy. If you are still not convinced about the importance of home insurance, we suggest you take a look at this section! Here are the eight reasons that make home insurance a must:
1. Financial Benefits and Protection
If a burglar attacks your home or your property becomes a victim of fire, how will you arrange the costs for replacement and repair? In today's world, repairing real estate and replacing appliances in your home isn’t cheap.
If anything happens to your insured home or the insured objects inside it the insurance company will cover the damage costs. With a home insurance plan, you will have financial protection.
2. Mortgage and Easy Access to Loan
One of the most important reasons to get home insurance is for the ease of mortgage. If you are aware of how home mortgaging works, you’ll know the importance of home insurance. You should note that home insurance is one of the mandatory requirements when you take a mortgage for your dream home.
Since your house is the lender's security, it is natural for the lender to protect the property. As a result, it is common for lenders and home mortgage companies to enquire about home insurance before mortgaging. Besides, some banks prefer to only offer loans against homes that have insurance.
3. Offers Coverage Against Accidents
Natural calamities can cause severe damages to your property. Thanks to home insurance companies, you don't have to bear the cost of repairing these damages alone. In case of fire, robbery, storm, or any other accident, home insurance comes in handy to share the cost of damage.
Your home insurance policy can payout for repairing the damage and replacements. Some of the insurance companies also allow you to add accidental damage cover. So, if you want to safeguard your home against any future accidents, consider purchasing home insurance.
4. New for Old
Most of the property or assets will probably have less value now than when you purchased them. For example, the different appliances in your home might be close to a shutdown. However, if some kind of damage happens to these gadgets and devices, you would want a newer version.
Home insurance programs have a new for old cover that lets you do that(remember that this can only be done when damage occurs to the devices involuntarily). You can replace your broken, dead appliances and objects with new ones. Note that not all home insurance policies come with this type of cover.
5. Allows Protection Against Liabilities
A home insurance policy offers liability coverage that protects you against property damage, personal injuries to your family and guests. It also protects you against damages or losses to a third party that you or your family might have caused.
In simpler words, if an individual is residing in the insured house and causes a loss, the home insurance can protect you against it.
6. Great for Home Emergencies
If you have burglaries or an unexpected pipe burst, or any other accidents around your house, you’ll want to fix it as soon as possible. You can add a home emergency cover with your home insurance plan that provides you with a quick fix.
It might also be such that your home emergency cover already comes along with your home insurance. If the insurance company does not include it, you can always opt for it separately.
7. Alternative Accommodation
Let’s hope that you and your family never have to face such a situation, but what if a fire erupted in your home or flash floods drastically affect your home? Not only will your house be damaged, but it will also be inhabitable. In such a situation, you have to look for alternative accommodation.
But, if you have home insurance by your side, you will have assistance in seeking alternative accommodation. Your home insurance program will help you, your family, and even your pets find a temporary shelter.
8. Peace of Mind!
Knowing that you will have some financial assistance when a natural calamity affects your house offers you peace of mind. You don't have to fear the finances of re-building a house just in case a natural disaster or other damages occur.
Even in terms of home loans and mortgages, you should know that getting one without home insurance is complicated. There are many ways you and your family can benefit from having home insurance. You could rest assured knowing that you don't have to bury yourself in serious financial issues if something happens to your home.
Well, the cover for your home insurance would differ from one insurance plan to another. Based on your needs and investment capabilities, you can pick a home insurance program for your property. Typically, home insurance covers the following:
Aircraft damage and explosion
Floods (requires a separate policy)
Earthquakes and other natural disasters
There are three types of home insurance commonly available with insurance companies:
Option 1: This plan only covers the personal belongings within your property.
Option 2: The plan offers cover for both the contents in your home and the building.
Option 3: Offers cover for your property and the items within your home. It also includes jewelry.
Depending on your home insurance company, you might find more options or options that have varying coverage(one such policy only covers property)
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Who Should Get Home Insurance?
Home insurance is a no-brainer regardless of the size and location of your home. However, it becomes a little extra vital if you are a renter or have recently bought a home. Home insurance might not look like a lucrative deal if your building or house has aged and requires a renovation. Here’s why new homeowners and renters should consider home insurance:
Renters: Even if you have tenants occupying your house, it doesn't matter! Your home and its contents will still be at risk of damage through fire and other natural disasters. Robbery is another situation that can take place within your property. Though not all insurance companies offer home insurance for renters, there might be other options. It is a good idea to check with your insurance company about this.
New Homeowners: You might already have undergone a massive investment to buy a new home. In such times, opting for home insurance might look like a pricey affair. But, home insurance should be on the priority list for a new homeowner. Your newfound abode might need some backup in case of emergencies. Home insurance protects not only your newfound place but also the investment you’ve put into it.
Will the Home Insurance Company Cover Damages Even If My House Was Unoccupied During Accident?
Generally, the damages covered in such situations will vary from one insurance company to another. Also, your location might be another factor that determines the payout in such a situation. Under most home insurance policies, any losses will not be payable if your home is unoccupied for seven days consecutively. Once again, the definition of non-occupancy will vary. So, it is ideal for clarifying such doubts with your insurer.
How Should I Reach Out to My Insurer After an Accident?
Immediately after your home suffers from a disaster or emergency, you should try to contact your insurer. It will ensure that the company settles your claims promptly. You have to contact the local office or the insurance company. Your insurance company might also provide you with emergency contact info.
Once you reach out to the company, they will deploy a surveyor. Upon identifying and inspecting the contents of the policy, they will assess the losses. Post that, you have to produce a KYC document to the insurance company. The good news is that the insurance company might relax the document requirements in a severe natural disaster.
Do Home Insurance Policies Cover Damages Due to Negligence of Tenants?
It is one of the most common questions that homeowners have. Home insurance policies will have the same coverage, irrespective of whether it is inhabited by your family or that of a tenant.
Unless it is a willful act, property damage due to tenants' negligence won’t hinder your settlement. But, not all insurance companies have the same policy for tenant negligence. So, it is our advice to consult your insurance company for such situations. It is worth mentioning that some insurance companies have specific covers such as “Liability of Tenants to Landlord.”
I Stay With My Peers. Can I Still Opt for Home Insurance?
If the property is your asset, you can buy home insurance. You can also take insurance cover for your belongings alone. Similarly, your peers can take home insurance coverage for their belongings. You should note that the insurer might end up denying a cover if it is hard to segregate the belongings.
Once again, it would be ideal to check how this works with your home insurance company. The policies and rules of each company for such a situation might vary.
Quick Links: Not all companies settle insurance claims fairly and promptly. Are you looking for a home insurance company with the best customer service? In that case, check out our website!
The Bottom Line
Be it a natural calamity or fire, either of them is not predictable. Saving your home from these types of accidents is not under your control. Apart from that, home insurance serves several other purposes. Without home insurance, you might not have the best shot at mortgaging your property. That said, there are thousands of companies that offer home insurance.
Do some groundwork before selecting an insurer whenever you want to buy an insurance policy for your home. Hopefully, this article helped you understand the importance and necessity of home insurance. So, what's holding you back? Take a step closer to safeguarding your sweet abode!
Quick Links: Your home needs protection from external perils. Don’t think any longer! Get an insurance policy for your home right away!
About the Author - Jill Maynard-Nolan
Jill Maynard Nolan is the president of Hull Maynard Hersey Insurance. Jill has been in the insurance industry since 1991, following in her father’s footsteps - Hull Maynard. Jill and her team is dedicated to provide the customer service you need to feel comfortable and confident purchasing any type of insurance you might need.
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