Do I Need Home Insurance? Understanding the Essentials of Protecting Your Home
For many, a home is more than simply a place to live, it’s a place to call home and it often has significant financial investment attached to it, along with sentimental memories one can look back on. Given this level of importance, one question often arises for both new and existing homeowners: “Do I need home insurance?”. In this post, we’ll go over all the benefits of having homeowners insurance, why it’s truly essential to protect your home and overall investment, and how it can protect you from financial ruin. Read on to learn more and should you need any assistance with your homeowners insurance policy coverage, contact us, and we’ll be more than happy to assist.
The Importance of Home Insurance
Home insurance, better known as homeowners insurance, is not simply a prudent financial decision, it’s very often a requirement. Below is why securing a well thought out homeowners insurance policy is the right idea:
- Legal Requirements: While homeowners insurance itself is not legally mandated if you own your home outright, if you have a mortgage, your lender will typically require you to maintain a certain level of coverage as a primary condition of the loan itself. This protects their investment in your property should an incident occur.
- Financial Protection: Homeowners insurance will cover the costs of repairing, rebuilding or replacing elements of your home, or the entire home, in the event of damage due to disasters such as fires, storms, and specific natural disasters. Without the right level of protection from your homeowners insurance, you’ll be responsible for the out-of-pocket costs associated with the events which caused damage to your home.
- Liability Coverage: If you happen to be involved in a lawsuit due to an injury occurring on your property, or a portion of your home causes damage to a neighbor’s home (i.e.: your tree falling on your neighbor’s roof resulting in damage), you’ll be protected from said lawsuit and medical bills arising from the incident.
What Does Home Insurance Cover?
A standard home insurance policy generally includes:
- Dwelling Coverage: Dwelling coverage will pay to repair or rebuild your house if it’s damaged by an insurable event such as a hurricane, hail, or fire
- Personal Property Coverage: Personal property coverage protects the contents of your home, such as furniture, appliances, and clothing, etc… against theft or damage.
- Liability Insurance: Liability insurance will cover legal fees and damages if you or your family members are deemed responsible for causing injury or damage to others
- Additional Living Expenses (ALE): ALE covers temporary living costs such as hotel bills and meals if your home is severely damaged and needs repairs
Tailoring Your Coverage
Every home and homeowner is unique, therefore insurance needs will vary from individual to individual:
- Assess Your Needs: You’ll want to take into consideration the specific risk associated with your property’s location, such as flooding, earthquakes, and yearly severe weather events. These events may require additional coverage beyond your standard homeowners insurance policy.
- Update Regularly: Taking the time to regularly review and adjust your policy to reflect any significant updates or changes to your home, such as renovations or purchasing expensive items which will remain in your home, will help to maintain a proper level of coverage should an incident occur.
Common Misconceptions of Homeowners Insurance
- “My home is too old for insurance”: Older homes can certainly be insured, you’ll just have to go through some extra steps to ensure certain requirements are met or possibly choose specialized insurance products.
- “I don’t need insurance if my house is paid off”: Even if you don’t have an obligation to protect your home with homeowners insurance due to mortgage lender requirements, it could be financially devastating to have your home destroyed due to storms, flooding, fires, etc… It’s best to maintain coverage, even if you don’t have to maintain coverage.
- “Basic coverage is enough”: Basic policies will typically not cover all possible risks (e.g.: floods or earthquakes will often require additional levels of coverage). Assessing your unique situation carefully and having the right level of coverage through your homeowners insurance policy will help protect you when you need it most.
Contact Us at Portsmouth Atlantic Insurance
While homeowners insurance is not legally required once you’ve paid off your home and own it outright, homeowners insurance protects your financial stability, personal property, and reduces or eliminates legal liability. Homeowners insurance acts as a shield, protecting you from the unpredictable. With the right homeowners insurance policy, you can ensure that your home is and those who reside within your home are secure, no matter what life may throw your way. You’ll want to contact us so we can help provide the personalized advice you need when navigating the complexities of homeowners insurance. We look forward to hearing from you soon and we’re eager to learn more about your property and unique situation to best develop the right homeowners insurance policy to meet your needs.