If you own your home outright and have tens of thousands of dollars in savings in case of emergencies, this article is not for you. Everyone else, you are going to need homeowners insurance.
Homeowner’s Insurance Protects Your New Home
Becoming a homeowner is monumental and exciting. Unlike when you rented an apartment, you can decorate and organize your home anyway you desire. Your new investment is not just a roof over your head to keep out rain and bumble bees: how it looks reflects who you are and what you and your family value. It’s a place for memories and traditions and Saturday morning cartoons.
If something bad were to happen to your new sanctuary, it would be difficult to deal with the loss of personal effects, and perhaps injury to loved ones. What you don’t want to worry about at all is whether or not you can replace what is damaged or stolen, or care for who is hurt. Homeowner’s insurance is there to fix the broken things and replace the missing things.
Getting The Coverage You Need
There are many different kinds of things you can get covered by homeowner’s insurance. Generally, they cover items that are stolen from your house, repairs and replacements if a pipe breaks and floods your basement, and medical bills left over from your neighbor tripping on your lopsided porch. What you will almost always see is an exclusion for acts of nature, meaning damage from hurricanes and earthquakes and other such natural disasters are not covered in the basic policy. However, you can add them for an extra fee. Also, fire insurance is usually separate, and costs extra.
It is a good idea to ask the insurance companies in your area to tell you what claims they get most frequently. You will want to make sure that you are covered for those kinds of claims! Obviously, you want to use common sense: if you live in a flood zone but your house is on a steep hill, you probably won’t have to worry about floods.
While you are shopping around a comparing prices, don’t forget to check with the company that provides you with car insurance. Many companies will give you discounts for carrying both policies with them.
If You Have A Mortgage
Almost all mortgage lenders will require you to carry homeowner’s insurance before they will issue you a mortgage, and some of them insist that the first year be paid in advance. You might not have thought to budget for the extra expense of paying for insurance on top of a mortgage payment, but you will want to calculate the expense to make sure your monthly payment is still reasonable for you.
It is very important that you keep your policy current. If you don’t, the mortgage company may select a policy for you, one that protects their interest in your house, but doesn’t necessarily protect you or your pessessions. The cost of this forced policy will be added to your monthly mortgage payment, and it will probably be much higher than what you were paying before.
If You Do Not Have a Mortgage
Congratulations! You are a rare person indeed. Most homeowners will not find themselves in this category. Nevertheless, it could happen, and you may be lulled into thinking homeowner’s insurance is just an extra hassle. This is true if you have the value of your house, plus extra, in a readily liquidated account, set aside for nothing else except home emergencies.
Considering that you probably just spent that savings buying your house, get the insurance. Newspapers frequently carry sad stories about the old lady in retirement who lost the roof of her house to a tornado and has to choose between fixing her roof or continuing chemotherapy, or the family being sued by their neighbor because their dog bit the neighbor boy, and now they have to come up with thousands of dollars in attorneys’ fees. All joking aside, a good homeowners insurance policy will probably cost you less than your car insurance, and cover you for everything from a small kitchen fire to the unthinkable. It is a worthwhile investment.
