Owning a home feels like having something that you must protect. What better way to protect it than by getting homeowners insurance? Homeowners insurance covers your home, enabling you to make claims in case of damage due to natural calamities like fire and people-made problems like vandalism. It’s a good investment because it gives you peace of mind and financial security in case something terrible happens. This article will discuss why homeowners should invest their finances in insurance.
1. Protects Equity, Putting Your Mind at Ease
For many people, a home is one of their most significant investments. Homeowner’s insurance protects the value of your home. It ensures that if something happens to your home, you won’t have to start building equity again. Equity is the value of a property calculated by finding the difference between the home’s worth and the outstanding mortgage loan. According to ValuePenguin, 85% of U.S. homeowners have home insurance. This doesn’t come as a surprise. When you insure your home, you safeguard your finances and investment from going down the drain in case of accident or damage.
2. It gives Protection From Loss or Damage
You can protect your house with security tools and safety gadgets, but they can only do so much to keep your home safe. Unfortunately, your home is still susceptible to threats, robberies, thefts, terrorism, and natural disasters. This is where homeowners’ insurance comes in handy. A home insurance policy covers more than just the building. It covers everything inside the house, including your expensive furniture, appliances, fence, and garage. The insurance cover also safeguards home designs that boost your home value. For instance, a vaulted ceiling and an open floor plan boost your home’s value by as much as 25%, per Home Logic.
3. Keeps You Away From Lawsuit
A homeowner’s policy protects you from being sued if someone gets hurt on your property. If someone gets bitten by your dog, your insurance will pay for it. Most home insurance policies cover personal liability up to $100,000, but you can buy more protection if your finances allow it. The insurance pays for the injured person’s medical bills. Sometimes, a person may file a lawsuit if they get into an accident on your premises. The lawsuit costs and compensation can be massive and overwhelming, depending on the nature of the accident. Luckily, the insurance covers attorney costs to defend you in court.
4. It Meets Mortgage Requirements
When you get a mortgage to buy a home, the lender gives you funds as a loan to pay for the house. Essentially, the lender invests in the property. For this reason, many lenders make home insurance a prerequisite to qualify for the loan. Why is insurance important for lenders? Damages reduce the home value. If the damage affects the paintwork, it affects the house’s aesthetic appeal. Although the insurance doesn’t cover paintwork, don’t fret. According to This Old House, paint should last between 10 and 20 years with the proper preparation.
5. If Need Be, It Helps With Relocation
If, for some reason you have to move out of your home to temporary housing, some insurance companies help with finances. For example, if a fire damages your home and you need to stay in a hotel during repairs, they provide additional living expense coverage. Ensure you understand your homeowner’s insurance policy and find out what is and isn’t covered.
Having your home insured gives you the peace of mind you deserve. Once you choose a home insurance policy provider, pay each premium on time. When you have insurance and pay premiums on time, you won’t have to worry about damage to your home.