A new home is one of the largest financial investments you’ll make during your lifetime. After spending time researching, preparing paperwork, visiting homes, and closing on your home, protecting your largest investment simply makes sense.
Home insurance safeguards your family from financial risk in the event your home is damaged or someone else is injured on your property. It covers expenses your emergency fund may not be able to cover, even if it’s fully funded.
While home insurance is another expense, it’s logical to ask if it’s something you need. Here are a few reasons why you need home insurance.
It’s required by your mortgage lender
Unlike car insurance, home insurance is not a state requirement for homeowners. However, if you finance your home purchase, your lender may require you to purchase coverage. Why? It protects their investment in your home in case it gets damaged by unforeseen circumstances, like a fire.
Meet with your mortgage lender to determine the minimum amount required (it usually depends on the amount of your mortgage) but you can purchase a greater amount to provide some additional protection for you.
Protects your home and belongings from loss
Standard home insurance covers your home and any unattached structures on your property from hazards like vandalism, theft, and natural disasters such as fire, wind damage, tornadoes, hurricanes, and thunderstorms (check with your individual policy to verify covered events). Your insurance will help pay for repairs and replacement whether a small portion of your home was damaged or your entire house was leveled.
Additionally, home insurance may cover you in case your stuff is stolen or destroyed by a covered hazard. This includes furniture, electronics, appliances, clothing, and more. This coverage extends past your physical home; it’ll protect your stuff anywhere in the world.
Provides liability protection
Home insurance does more than protect your home and belongings. It also protects you in case a visitor becomes injured on your property and they seek compensation. It’ll cover any medical costs and legal expenses if you’re sued. Your protection also extends in the event that you or a family member accidentally damages someone else’s property.
Covers expense if your home is unlivable
if your home becomes uninhabitable following a covered event, your home insurance can help pay for temporary living costs while your home is repaired. These costs may include housing expenses (hotel or otherwise), food, storage, laundry, and selected additional expenses.
Provides peace of mind
Knowing you’re covered financially from the unexpected can be a huge relief. This allows you to focus on other things instead of worrying about how to rebound. Home insurance is designed to cover the financial hits and gives you a better chance of remaining financially stable following an unforeseen incident. It helps you to avoid or minimize unwanted debt.
Talk to a home insurance professional
Knowing you’re covered in a disaster gives you peace of mind, which is priceless! The last thing you want to worry about is how you’ll repair, rebuild, or replace following an accident at home. If you want to protect your home and family, having home insurance is a must.
If you have any questions about what home insurance can cover or which policy is right for you, reach out to a trusted insurance broker who will be able to answer any questions, recommend the best coverage, and help you file a claim.