Homeowners insurance covers damage that may occur to your home due to fire, certain natural disasters or theft. Additionally, homeowners insurance can cover liability in the event someone is injured while on your premises. Homeowners insurance rates can vary widely depending on the type of coverage you want and the value of the property you are protecting. Additionally, homeowners insurance rates may be affected by other factors such as where you live, the amount of deductible that you have, the breed of dog you have and whether you have a pool or trampoline. In addition to covering the value of your real property, homeowners insurance also covers the contents of your home, so it is important to purchase coverage that can properly protect your property. Four of the most important reasons why you should purchase homeowners insurance include:
If you owe a mortgage on your property, your mortgage lender will require you to maintain homeowners insurance on your policy. This ensures that your lender’s financial investment in your home is protected in case of fire or other damage. If you pay off your mortgage and later decide to acquire a reverse mortgage, one of the conditions that you may have to meet is to maintain homeowners insurance on your property. Failing to comply with this requirement may result in the reverse mortgage holder having the right to possess your property.
Another reason why it is important to purchase homeowners insurance is to protect your investment. For most people, their home is their most valuable investment. They may spend many years to pay off a mortgage and do not want to lose this investment in an instant due to a fire, tornado or other disaster. If you have paid off your mortgage, it is still preferable to retain insurance on your home so that you will be protected in case of great loss. Homeowners insurance can pay to repair damage or loss to your property. Depending on your policy, it can provide broad protections for your property, including:
Another important reason to maintain homeowners insurance coverage is to protect yourself from any possible liability. Your insurance can protect you in case you are sued by a guest or other individual who is injured on your property. This portion of your homeowners insurance may pay for legal expenses (such as a Connecticut Real Estate Attorney), medical bills (for any injuries from the property), the victim’s lost wages and other damages so that you can be personally protected from these claims.
Some insurance plans may provide for additional living expenses in case a covered event arises. Homeowners insurance coverage may pay for hotel bills or temporary living expenses if your home is uninhabitable. This coverage can provide you with the peace of mind that your family will be safe even if a disaster occurs. Homeowners insurance rates may be slightly higher for this type of coverage if it is not included in the standard policy.