When you're shopping for homeowners insurance, some questions may come up. Is home insurance really necessary? What is the value of home insurance? Does it really pay off later to insure my home now? You've probably asked at least one of these questions at some point in your life as a homeowner. But the truth is, insuring your biggest investment is important. Here are some of the key reasons to help you understand why homeowners insurance is so critical.
Your lender requires it. Before funding your mortgage or refinance, a lender will ask that you provide proof that your home is adequately insured. Why? Because they want to make sure their financial stakes are protected. In most cases, if you don't secure a home insurance policy within a given timeframe, your lender will either cancel the deal or purchase insurance for you and add the premium to your monthly payment. In the interest of ensuring you have a homeowner's policy that meets you specific needs, as well as your budgetary concerns, it's best to secure an insurance policy on your own rather than leaving it to your lender.
Your home is your biggest investment. Unlike cars, which depreciate the minute you drive them off the lot, houses typically increase in value over time. Sure, the market ebbs and flows, and during times of recession it can seem as though house prices will never bounce back. But recent headlines have shown us that the U.S. housing market is making a comeback. From a long-term perspective, owning a home is a financial investment that can ensure your security in years to come. Having an insurance policy in place to protect that investment should be at the top of your list of priorities.
An active home insurance policy brings peace of mind. Can you really put a price tag on peace of mind? Having a home insurance policy won't prevent random acts of nature, but it does put a safety net between you and catastrophe. As long as you have that in place, you can rest assured that you'll be better equipped to weather a storm or crisis.
Home insurance often pays for damage, theft or destruction of your belongings. Yet another perk of having homeowners insurance is the ability to recoup damages if your home is broken into and your possessions stolen. Likewise, in the event of a fire or other catastrophe, your homeowner's policy will help pay to replace or repair your expensive belongings.
If you're shopping for insurance or considering switching providers, be sure to research all of your options to make sure you pick the coverage that's right for you.