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Five Reasons Why You Must Have Homeowners Insurance
Author David Schneider | Aug 29,2007
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After securing a mortgage, selling their old house and moving all of their stuff, its easy for people to forget that homeowners insurance is one of the most important things you need to bring with you on the move. Even if you are not moving anytime soon but are living without homeowners insurance, it's likely that you need it. Here are five reasons why you must have homeowners insurance.
1. Bad things happen when you least expect it.
No one ever thinks that they will lose all of their belongings in a fire or other disaster. Unfortunately, it happens every day. Without homeowners insurance, you are taking an unwise gamble with your home and all of your possessions.
2. Your home is your biggest investment.
Everyone is required to have auto insurance, but even most luxury cars are only worth a fraction of the cost of a home. A home purchase is the largest investment that most people will make in their lifetime, so why not protect it with homeowners insurance? Typical policies will cover damages from fire, lightning, riots, theft, vandalism, smoke, explosions, falling objects and even volcanic eruptions. Be careful though and check your policy for a list of any specific exclusions. Flood insurance is usually separate, as is earthquake and landslide insurance.
3. Homeowners insurance can cover your personal property.
In addition to your home, all of the property inside of it can have significant financial value. Most homeowners insurance policies will protect all of your personal belongings inside of your home in the event of a disaster that is covered by your policy. Just be sure to do an accurate inventory of your personal property when you buy your homeowners insurance and be sure that you have enough coverage.
4. Homeowners insurance covers personal liability anywhere in the world.
As if covering your home and your personal property wasn't enough, homeowners insurance will typically cover personal liability as well. That is to say, if you or a member of your family causes damage to someone else's property, your policy will generally cover the cost of defending you in court and paying out any awards to the plaintiff (up to your coverage amount). This also covers your pets. For instance, if your dog was to dig up and destroy your neighbor's garden, you will still be covered.
5. Most mortgage lenders require you to have homeowners insurance.
Even if the first four reasons don't make you grab the phone to call a homeowners insurance agent, this one is sure to get you: You are probably required to have homeowners insurance. If, like most people, you are paying off a mortgage, there is a good chance that your lender requires you to have homeowners insurance. This is because the lender - who technically owns the portion of your home that you have yet to pay off - is just as interested in protecting the value of your home as you are. |
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