Home owner insurance is one of the granddaddies of the insurance business because a home purchase is one of the biggest long-term investments the average individual will undertake. Home insurance ranks right up there with life insurance. The difference between the two is home insurance is beneficial to the homeowner, while life insurance is beneficial to your next of kin.
When you buy your home, you must take on another important purchase: a mortgage. Unless you’re really wealthy, a mortgage is mandatory. That’s the way purchasing home owner insurance should be approached. So, as you continue to pay off your 15 or 30-year mortgage, you need to purchase home insurance as well.
When your purchase home insurance, you are basically sealing a deal with an insurance agency to pay for any type of financial calamity related to your home. Of course, it’s your job as the homeowner to pay a monthly premium.
So, why is home owner insurance so important?
It’s simple. If any kind of horrible event occurs to your home, you will be very thankful you chose to insure your home. The insurance company will cover the cost of damages or injuries. If you don’t have any insurance, you will personally assume the risk. True enough, there may not be any significant events tied to your residence. But, you rather be safe than sorry. If you are a homeowner, but have no insurance, there’s no time to waste.
What types of significant events are covered?
I’m glad you asked. Below are the four types of coverage available to homeowners, according to homeinsurancecenter.org. They are:
- Home structure: this includes natural disasters like earthquakes, volcano eruptions, tornadoes, violent thunderstorms, and fire due to lightning. This coverage also insures crashes, which includes aircraft, car, truck, or any other vehicle that damages your home structure. Structure damage also includes vandalism committed against your home or structural damage attributed to riots or out-of-hand demonstrations.
- Property: this coverage includes property that was stolen or misplaced within the home. Sadly, many people have to file this claim during homeownership.
- Temporary relocation in the event of a disaster: If there is a terrible natural disaster and you have to vacate your home, this coverage handles any living expenses incurred during relocation.
- Liability: Home insurance is not just a one-sided deal. It also covers you if you are liable for another person’s injuries resulting from an accident on your property. For example, if you failed to get a piece of sidewalk fixed on your property and someone takes a spill, you are responsible. When this happens, the insurance company will have to pay out.
We must not forget that home owner insurance covers fires that are not the result of lightning as well. In fact, it is often nicknamed “fire insurance.”
When you shop for carriers, be sure to investigate their legitimacy. There are many good carriers online, but there are also frauds. It is advisable to settle with a company that you’re familiar with. That way, if a problem arises, they are readily available to solve your problems.
By Michelle Presbury