Homeowners insurance is one of those things you don’t think you need until you realize that you could literally lose everything you own if you don’t have it. Home insurance is a type of property insurance that provides financial coverage to private homeowners in the event of financial loss due to a catastrophic event involving their place of residence. Without it, homeowners would have to pay for losses themselves, a situation that could be financially disastrous for a family. Knowing that you’re covered can help bring you peace of mind. Following is key information every homeowner should know about homeowners’ insurance.
Am I Required to Have It?
One of the first questions that homeowners often ask when buying a home is whether or not they’re required to have home insurance, and the answer is technically “no.” According to LoPriore Insurance Agency, homeowners insurance isn’t legally required, though banks or lenders may require it as a condition of the loan. The reason that lenders want borrowers to have home insurance coverage is that they want borrowers to be financially solvent in case of a disaster so that they’re able to continue paying their mortgage. Even if you’ve paid all cash for your home and you don’t carry a mortgage or owe money to a lender, it’d still be in your best interests to get homeowners’ insurance so that you don’t have to pay out of pocket in case something goes wrong. In addition to protecting you from losses connected to your home, home insurance can also protect you if someone gets hurt in your home.
How Do I Pick a Good Policy?
Once you’ve decided to get homeowners’ insurance, the next step is to choose the policy that works best for your home and your situation. Taking the following steps can help you make a good choice:
- Shop around with as many insurance companies as you can. Speak with agents about exactly what you’re looking for so that they can suggest a policy that accurately reflects your needs
- Keep an eye out for discounts. Many companies offer special deals and discounts if you take preventative measures like installing burglar or fire alarms. Plenty of companies offer you deals if you bundle your home insurance with your car insurance or other insurance policies
- Figure out how much of a deductible you want to pay. The deductible is the amount you have to pay out of pocket before the insurance company reimburses you for any losses. You’ll need to base this amount on how much you’ll be comfortable paying in case of extensive losses.
What’s Not Covered Under Home Insurance Policies?
While home insurance is an excellent thing to have, it doesn’t cover everything. According to RestorationMaster, flooding, water from sewer backups, and events like acts of war or nuclear damage are not included in standard home insurance policies. If you live in a flood zone, check with your insurance company to see if you can buy a separate flood insurance property.
Speak with an insurance agent to find out which type of homeowner’s insurance will work for you. A little bit of research now can save you thousands of dollars later.