If you own a house, you need to have homeowner’s insurance. Your insurance is a policy that you pay for each year so that you can have the insurance company’s support if something happens to your home. While homeowner’s insurance might seem like an unnecessary expense, it is absolutely essential. Here are five reasons why you need to have homeowner’s insurance.
1. Your Bank May Require It
In order to get a mortgage, you need to fulfill certain obligations. For many mortgage providers, homeowner’s insurance is one of those obligations. In order to borrow money from them, you need to show that you have insurance. This is because your bank is putting up the money for your home. If something goes terribly wrong, they don’t want to be on the hook for expensive repairs. So, while you might not want to get insurance, you might not have a choice if you want a mortgage.
2. House Fires Can Happen
Even if you’re extremely responsible, a house fire can always happen. Whether it’s a cooking accident or an electrical issue, all it takes is one spark to set off a massive fire. According to The Zebra, about 358,500 homes have a fire each year. Some of these fires result in minor damage, but others can be catastrophic. If you have a fire that destroys your house and your possessions, homeowner’s insurance can help you get back on your feet afterward.
3. Replace Your Belongings
If something happens to your home, most people know that insurance will help you to rebuild the house itself. However, homeowner’s insurance can often also replace your belongings. If a fire, flood, or other situation destroys valuables inside your house, it can be very expensive to replace them. You need to consider the cost, as well as the sales tax in your area. For instance, the sales tax in Florida is 6%. That’s even more money on top of what you’re already spending. If you have insurance, your insurance provider can ease the financial burden of replacing your valuable and necessary belongings.
4. Save Money
Owning a home costs a lot of money. Many homeowners are not wealthy. Some, like highly-paid lawyers, might be. The US Bar Association found in a 2005 study that 70% of US lawyers are male while 30% are female. Situations like this can cause pay gaps that can impact people’s finances. Homeowner’s insurance can help you save money if there is damage done to your home. You can also look for discounts on your homeowner’s insurance, which can provide you with the necessary protection while also saving you this money. Consider things like bundles, loyalty discounts, and shopping around for different providers. That way, you still get the benefits of insurance, but you’re paying less money.
5. Protect You From Lawsuits
When you’re a homeowner, you are responsible for keeping your property safe. If someone is injured, then they have the right to come after you to pay their medical expenses. Many homeowners’ insurance policies will cover medical bills and other expenses that can occur after an injury on your property. While you hope that you’ll never have this problem, at least you know that your insurance company will cover the expenses and it won’t be coming out of your pocket.
Homeowner’s insurance might not be a fun expense, but it is a necessary one. Without it, you could be at risk of paying significant amounts of money to cover injuries or damage to your home. So make sure that, as you look for a house, you’re considering your insurance options. You’re going to need it, so choose the option that is best for you.