When I got my kids a dog, I had no idea that it could affect my homeowners insurance. I happened to run into my insurance agent in the store when I was buying dog food and he asked me what kind of dog we had. When I told him, he said I should stop in the office the next day. I had no idea that things like this could affect premiums, so I started asking what else could do it as well. I created this site to help others understand some of the finer points of homeowners insurance and what they should think about to manage their rates.
Most homeowners buy home insurance to help them with home repairs or rebuilds in case of damage. However, home insurance includes different forms of coverage that offers much more than repair or rebuild benefits. Therefore, even if you aren't worried about the cost of repairing or rebuilding your home after a disaster, you should still buy homeowner's insurance for these three reasons:
For The Liability Coverage
Your home insurance doesn't just cover your structure and its contents; it also includes liability coverage. The liability coverage comes to your rescue if you (and your household members including pets) or your property causes injury to others who aren't part of your household. For example, if your dog bites your neighbor's kid, it's the liability portion of your homeowner's insurance that will pay for the damages. The liability coverage will also pay for the damages if someone trips on your broken front steps and breaks their ankle.
For The Additional Living Expenses
If your house is damaged and you have to live elsewhere while it's being repaired or rebuild, you are likely to spend more money than you would have spent while living at home. For example, you may be forced to pay for rent and eat takeout food (if you usually cook at home). The difference between what you would have spent at home and what you are actually spending elsewhere is called additional living expenses (ALE). Most homeowner's insurance policies include ALE coverage so that you don't have to spend your own money while your house is being fixed.
To Meet the Lender Requirements
If you bought your home on mortgage and you haven't finished the payments, then the decision of whether to buy homeowner's insurance isn't entirely up to you. This is because the home doesn't belong to you in its entirety while you are still servicing the mortgage; the lender also has an insurable interest in it. Therefore, the lender will insist on a minimal level of coverage that is at least adequate for rebuilding the house in case it's damaged; you are free to buy additional coverage if you so wish.
Standard homeowner's insurance makes a good buy because it's sold as a package. The above three forms of coverage are bundled with building and contents coverage. If cost is the issue, look for ways of lowering your rates (your agent can help you with this) instead of ignoring coverage altogether. For more information, contact companies like Reinhardt's Insurance Agency.
Share27 March 2017
