A house is usually the largest asset / investment the average person will ever own during their lifetime and protecting this asset should therefore be a priority in order to maintain any individual's financial and personal stability.
Would you really be able to afford the cost of replacing your house and all its contents on your own if unforeseen circumstances like fire, flood, burglary or storm were to destroy it? Without home insurance, not only could you be rendered homeless, you stand to lose everything that you have bought to equip your house.
Besides losing your belongings through the natural calamities stated above, you can potentially lose them as a result of theft and without home insurance you may find it hard to replace them.
While you may hate paying the premiums each month, home insurance - also known as hazard insurance or homeowners insurance - is a necessary evil, whether you live in a small house that is all paid for or a huge mansion that you carry a great mortgage on.
A home insurance policy can cover you during the construction of your house but in such cases you need to have the insurance in place before the basement or slab is poured. You will similarly be covered should you decide to carry out renovations on your home.
If you have a mortgaged property, most lenders actually insist that you have a home insurance policy to make sure that their collateral is protected in case something happens to it. You might have no choice in this matter as the mortgage may include a term which requires compulsory home insurance coverage to be effected.
Additionally, home insurance can help protect you from any lawsuits or personal injury claims that may arise if someone were to be injured on your property.
Home insurance is actually a generic term which refers to 2 separate products, contents insurance and buildings insurance.
Standard home insurance policies may not always cover all damages associated with some natural disasters, so getting an endorsement or separate insurance policy in the form of flood insurance or earthquake insurance, etc, might actually be a good idea especially if you live in areas prone to such natural calamities. In any event, it is important to get your home appraised every few years to make sure you have adequate insurance for all the insured perils you envisage or intend to cover.
No comments:
Post a Comment