The Importance of Homeowners Insurance
Without proper insurance protection, it just takes one unfortunate event to turn the dream of homeownership into a nightmare. A home is usually the largest investment an individual will ever make. Why not protect it right with the right insurance coverage?
What Is It
Homeowners insurance is designed to protect a home one owns, and the people and possessions within it, from any covered event or peril that results in loss. Usually, this includes fire, theft, accidents, and even vandalism.
Homeowners insurance has two main components. First is the protecting of the home and the contents within against covered incidents like wind, hail, fire, theft, etc. Another aspect is personal liability coverage that protects the policyholder from things such as legal action from visitors being injured on the property.
Who Needs It
If you own a home, you will need homeowners insurance. Not only will you want it for your own financial protect, but you will also very likely be required to carry it by the financial institution that lent you the money to buy it. If you try to avoid purchasing a policy, then your lending institution will put one in effect for you and add it to your mortgage payments. Banks have an aversion to losing money, and homeowners insurance is a must.
Your policy coverage will usually extend to some natural disasters, but not all. Almost standard is the exception of earthquakes, floods, and hurricanes and you will need to obtain separate policies for these perils. Ask your insurance professional about what coverage for natural disasters is best for your situation and for the region in which you live.
How Much Coverage
Homeowners coverage is available at varying levels. Usually, your state will have set minimums for what your insurance provider should offer in a policy. Your mortgage lender will also likely have its own minimum requirements. It should be no surprise that the more expensive your home and the belongings within it, the more you will spend on insurance premiums.
Riders (or supplemental protection) are helpful if you own really valuable items, such as expensive jewelry, coin and stamp collections, fine art or antiques. When purchasing a home policy, your agent will ask what, if any, unique or valuable items you might have. Being completely honest will save you a lot of potential heartache down the line.
Perhaps the biggest bonus of good homeowners insurance is the peace of mind inherent in the feeling that you and your loved ones are protected from many types of unexpected events.