Why You Need Homeowners Insurance
If you find yourself wondering if you really, truly need a homeowners' policy, you might ask yourself if you can afford to rebuild your home without it. For most people, rebuilding a home from scratch without any sort of coverage wouldn't be a possibility. While the economy has made money tight for lots of people for a while now, getting rid of your home insurance isn't an option. In fact, if you have a mortgage, having homeowners insurance is required.
Before a mortgage loan becomes final, lenders require homebuyers to purchase at least a kind of hazard policy, which is a minimal level of standard home insurance. This not only ends up protecting your investment, but the mortgage company's investment as well. And having this coverage is definitely worth it in the long run, since it protects you from being financially responsible for losses from theft and many natural disasters.
What Your Policy Will Cover
It's obvious that this type of policy covers the home, but what exactly does that mean? Generally speaking, your policy will cover any costs associated with repairing or rebuilding your home in the case of catastrophe. Homeowners' policies also cover other physical structures on your property, like any detached garages, sheds, or swimming pools. While these are the actual buildings covered, most of the personal items you keep in your house - furniture, clothing, electronics, and almost anything else that might be enticing to burglars -- are also covered.
Standard homeowner's policies also cover most types of personal injury claims. For example, what if a deliveryman visiting your house happens to slip on a patch of ice, or gets bitten by your dog? Though unfortunate, these things can happen. Personal liability insurance can prevent you and your family from being sued, and will pay for the person's medical expenses and other losses, up to a certain amount. However, some types of homeowners' policies don't necessarily cover personal injuries, and lenders don't always require this component either. Be sure to check with your carrier to see what types of injuries are covered.
Special Considerations - Insurance For Your Home
Depending on the area where you live, you may be prone to floods, fires, earthquakes, or hurricanes. However, damage from many of these natural disasters may not be covered under your standard home hazard policy. You most likely will have to purchase additional policies to cover these types of damage. Usually, when you first discuss home insurance options upon finalizing a mortgage agreement, the carrier will clearly let you know what they require you to have, and what's covered under that policy. You'll be able to purchase additional coverage if necessary. You may also need to buy extra coverage due to expensive jewelry, art, furs, or business equipment.
It's a good idea to take an inventory of all the belongings in your home every few years. Make a list of everything worth more than about $50, and take pictures of these items. Write down a complete description of everything, including the make, model, and serial number; record the item's location; take down its purchase price and current value; and the location of any extra supporting materials that go with the item. Make a copy of this inventory and keep one copy in a safe place like a fire-resistant cabinet. Give another copy to a family member, friend, or neighbor.
Homeowners insurance is very important to keep you from having to pay for repair damages to your property. Contact your insurance agent today to find out exactly what your policy covers.
About the Author:
Chris Harmen writes for Joseph M. Wiedemann & Sons, a home insurance, Chicago, company with over 70 years of experience in commercial, personal, and homeowners insurance, Chicago.
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