Top 4 Benefits of Homeowners Insurance
There’s a lot going on when you’re buying a home. Trying to figure out the benefits of homeowners insurance shouldn’t add to that list, so we wanted to spell it out in a short article.
Benefit of Homeowners Insurance #1: It Lets You Own
One of the most important things to consider about homeowners insurance is that it’s required. According to the Insurance Information Institute, homeowners insurance is required by lenders because they want to protect their investment.
For example, let’s say a lender gave you a loan and let you go ahead and borrow the money without any insurance. Everything is fine for a few years… but someone accidentally leaves food in the oven and leaves the house. This causes a fire and it’s a total loss. The entire house is gone.
If there’s no insurance, that means you have to pony up all the money yourself to rebuild the home. Not only that, but you’re still paying off the loan from the lender! Do you have that type of money? The vast majority of us don’t. So you may choose to just walk away from the house and the loan.
Now the lender is in a tough spot. They have a loan with you that you aren’t paying. They can’t repossess the home because there’s nothing to repossess! It’s just an empty lot.
If you had insurance, this would be a different situation. The homeowners insurance would pay for the house to get rebuilt. You now have a brand new home and the lender has a home that is a tangible asset they can sell off in case you default on the loan.
So to summarize – the #1 benefit of homeowners insurance is it lets you buy a home!
Benefit of Homeowners Insurance #2: Peace of Mind
That scenario we just outlined would be devastating to go through. Could you imagine losing your entire home? Not only that – but if you didn’t have any insurance to rebuild the home, that means you now have double trouble. You don’t have a home and you don’t know how you’re going to afford another one – on top of filling it with a bunch of possessions again.
With homeowners insurance, you don’t need to worry about that. If something bad happens, you know you’re covered. Whether it’s something small or a complete loss, you’re covered. The company will cover both damage to the home and the possessions inside.
No, some things can’t be replaced. But at least you can get replacements for things like your furniture, appliances, etc.
Benefit of House Insurance #3: External Structures are Covered
Did you know that external structures can be covered by your homeowners insurance? Typically the value is up to 10% of the value of the home, so that’d come out to about $30,000 on a home worth $300,000. That can cover a lot of different things!
- A fence around the property
- A shed, maybe one you kept tools in
- A detached garage
For some people, this may not be a big deal. But if you have a big external garage or shed with a bunch of stuff inside, you’ll be glad your homeowners insurance covers it in case it’s all damaged, stolen, etc.
Benefit of Homeowners Insurance #4: Loss of Use Insurance
Let’s say there’s an incident where water floods across the home. A ton of work has to be done – carpet needs to be ripped up, you need new drywall and insulation, etc.
Do you want to live in a house with that much renovation going on? Probably not. Luckily, loss of use insurance saves the day. Your insurance company will pay for your hotel and meal expenses so you can stay in a hotel until the work is done.
Is living in a hotel fun? Not really, but it beats living in the middle of a renovation project!
We Can Help
Would you like a homeowners insurance quote? We’d love to help! Just give us a call at 877-600-7347 or click here to request a quote. Talk to you soon!
