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Buying Home Insurance Is Not Only A Mortgage Requirement; It’s Also The Smart Thing To Do

Homeowner insurance is an integral part of home ownership that you can’t afford to ignore. In fact, it is doubtful that you’ll be able to secure a mortgage deal on your property if you are not willing to purchase a minimum amount of insurance. Mortgage lenders understand that your house is standing collateral against the “loan” you took to purchase the property; hence, insurance is an important requirement. If fire razes down your home, you’ll still have mortgage debt unpaid and the mortgage firm technically won’t have any collateral to hold on to.

If your property becomes damaged or if someone becomes injured on your property, having an active insurance policy can help you mitigate the financial consequences of the accident. This piece looks at three key policies that make homeowners insurance a must-have for the discerning homeowner.

You can’t ignore hazard insurance

In the event of unintentional damage or destruction such as storm, firm, wind, storm, and hail, hazard insurance can play a crucial role in protecting you. Hazard insurance could provide respite by covering the cash value for replacement or repair of the damaged structures. For instance, insurance are set to pay more than $60 billion in claims to people who suffered losses during the Hurricane Harvey and Hurricane Irma disasters.

Without adequate insurance coverage against natural disasters and unforeseen circumstances, the distance between being a property owner and becoming a homeless person is actually very short.

You can’t afford to ignore liability insurance

Liability insurance is another major component of homeowner insurance that you can’t afford to ignore. Liability insurance protects you from being responsible for paying third-party claims in the event that someone is injured, wounded, (or dies) on your property for any reason whatsoever. There’s a whole industry built up around litigations and people will sue you for a piece of your action over any real or imagined discomfort to their person.

Liability insurance protects you from litigants by removing you from the emotionally draining claims and counter-claims process. If the courts do determine that the litigant should be compensated, the insurance company will foot the bill of the claims to a certain policy limit.

Home warranty is another important policy

A homeowner insurance policy will protect you by providing financial respite in the event of damage to your house. The liability part of the insurance will also protect you from litigants. However, a homeowner insurance policy will only cover the structure of your house or third party liability in the event of an accident. The insurance policy won’t cover the systems in the home, your appliances, and other valuables if they become damaged from regular use.

You’ll need a home warranty to get coverage for the repair or replacement of major home systems, components, and appliances that might break down due to regular wear and tear. A home warranty protects you from unexpected financial expenses because the breakdown of home systems and appliances are usually sudden and unexpected. A home warranty also excludes you from the stress of looking for a reliable contractor who will take up the project to repair or replace the damaged components.

However, you need to conduct your due diligence to find the cheapest and best plans by reading reviews and testimonials before you buy any home warranty plan. More importantly, you should ensure that your take the time to read and understand the home warranty policy so that you are clear on what the policy covers and on what the policy doesn’t cover. Homeowners also need to remember that some home warranty companies will requires that you foot a part of the repair bill or pay a service call fee every time you make a claim.


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