If you own your home one of the biggest mistakes you can make is not carrying the proper amount of home insurance coverage or the right type of home insurance coverage. Those with a mortgage never have to worry about this, as their lender will ensure they don't drop their coverage. However, if you own your home free and clear the choice is more or less your own.
There are many reasons why some people live without homeowners insurance coverage. Most commonly, they want to save the money. While there is no denying the fact that you can save by not purchasing a policy, you are taking a very big risk with what is probably the biggest investment you have ever made.
If a disaster strikes in the future and you don't have insurance, 100 percent of the financial burden will be thrown on your back. You either pay the money out of your own pocket for the repairs, or you live with your home the way it is.
Common Home Insurance Claims
Now that you know why it is important to have home insurance, let's take a closer look at some of the situations that will make you happy that you made this buying decision:
- Water damage. From a broken pipe to a leaky roof, water can wreak havoc on your property. This has always been one of the most common home insurance claims, and there is no reason to believe this will change in the future.
Note: Your home insurance policy will not cover your property against flooding. You need a separate flood insurance policy for that.
- Fire. There is nothing scarier than the thought of a fire breaking out in your home. Not only can this cause extreme damage to your property, but it can also harm anybody who is inside at the time.
A fire can be caused by anything from a faulty appliance to a bad electrical job, and that is just the start. In addition to covering the structure itself, if you have the right policy your personal belongings will also be accounted for.
- Watch out for that tree. Do you have trees in your yard? If so, you probably enjoy the fact that they look nice and keep your home cool during the warm summer months. That being said, if a bad storm blows through, one of these trees could end up in your living room before you know it.
If this happens, you can only imagine how much damage will be caused to your home. From the façade to the roof, the damage can be extensive.
- Dog bites. If you don't have a dog you don't have to worry about this potential home insurance claim. Those who do own a dog should realize this is a very serious concern, as it could cost you (if you don't have coverage) a lot of money should something happen to a visitor.
Fido needs to be kept indoors or inside a fence. Just because your dog is friendly to you does not mean the same will hold true with visitors, such as the deliveryman or neighbors.
- Visitor accidents. As a homeowner, you never know when a visitor will step foot onto your property and be involved in an accident before they leave. Slip and falls, for example, can be a result of everything from an icy walkway to crumbling concrete steps.
Note: Make sure your home insurance policy covers injuries sustained by visitors.
Already have Coverage?
For those who currently have home insurance coverage, this article may seem like a waste of time. But don't write it off just yet. Who is to say that the coverage you have is actually the coverage you need? There are different types of home insurance coverage.
You need to contact your agent, discuss your concerns, and ask if you are covered against the five situations detailed above among others.
There is a big difference between having the minimum amount of home insurance and purchasing a comprehensive policy.
Once you have spoke with your agent and feel comfortable with the policy that is in place, you can live your life without the fear of a disaster at home ruining your finances forever.