People buy houses or consider buying houses on a daily basis. There are many advantages to buying a house, yet many people shy away from paying homeowner’s insurance. Homeowner’s insurance provides you with financial protection in the event of a disaster or accident involving your house. Usually, it insures your house and your belongings in the event of a destructive disaster/accident. Since disasters and accidents are unforeseen, homeowner’s insurance becomes intangible. Due to that reasoning, people are often not satisfied with paying a high amount of money for homeowner’s insurance every month in addition to the mortgage payment, which is also monthly.
Homeowner’s insurance is something very important, but you would hope to never actually have to use it. It is a safety net for unforeseen circumstances and you never know what might happen in the future. Lenders require that homeowners have appropriate insurance before funding a loan, which is common for buying a house. Basic homeowner’s insurances cover damage caused to the house by fire, vandalism, hurricane, lightning, or other specifically covered events (disaster/accident related). Homeowner’s insurances also cover loss or damage of personal property due to theft or other covered events, but expensive property may need additional coverage.
Another important fact to know about basic homeowner’s insurance is that it does not cover damage caused by an earthquake or a flood. Insurances generally do not provide coverage for damage caused by chronic or extreme neglect or faulty maintenance. Some people choose to opt out of coverage if they are not required to have it in order to buy a house. In the event of damage or an unforeseen circumstance, an uninsured homeowner might lose the house and a place to live in general. A house is a very large asset for many people and not something they can even imagine losing due to the hard work it takes to become a homeowner. Even if fire or wind damage never occurs, any unforeseen accident could cost a homeowner thousands for medical care and lost wages, especially with no homeowner’s insurance.
Overall, it is very important to consider homeowner’s insurance if you are thinking about buying a house or currently an uninsured homeowner. Homeowner’s insurance may not always be required, but it is truly a safety net. Even lenders want to be sure their financial investment in your home is protected if it’s damaged or destroyed by a fire or other specific circumstances.