Homeowners insurance – you’re often not legally required to have it (though sometimes are) and it’s the type of thing that you theoretically could never use, but the truth is that home insurance is truly invaluable.
It’s easy to tell yourself, “I’ll probably never get robbed” or “It’s really unlikely that something will ever do big damage to my house”, but invariably these things happen – and at these times insurance feels less like a hassle and more like a gift from the heavens.
It is always a good idea to compare home insurance, as it may vary a lot with different companies and policies, but the basics are as follows:
The most important part of insurance coverage is property protection. Firstly, it protects your house and attached structures such as storage sheds or garages. Even if you live in areas that are free of natural risks like blizzards or earthquakes, it’s important to protect against social depreciators like vandalism, as well as theft. You’ll also be covered if there’s a structural malfunction, such as a water pipe bursting, permitted there are no obvious signs of neglect to these parts. Perhaps most importantly, in any instances of excessive damage done to your home, property protection will cover your living expenses while it’s being repaired – you can only imagine how priceless this is until it happens to you.
Secondly, it covers your personal property. Now, different policies will cover personal property differently; some will reimburse you for the initial value of the property, though others will factor in depreciation. Hint: lame as it may seem, if you photograph or video you and your personal property it can make the whole process of reimbursement a lot easier.
Liability protection covers you in case an injury is sustained on your property. If you have a guest on your property and they fall and injure themselves, you can be held responsible for their medical bills – which can often be surprisingly large. Liability protection protects you and your guests from those hefty bills.
It’s also important to be conscious that you’re not underinsuring. Yes, paying insurance can be irritating, but you have to be sure that you’re paying enough that it can properly help you if a catastrophe arises. Most people only realize they’ve underinsured once they try and file a claim – and this happens a lot. In 2005 the Australian Securities and Investments Commission estimated 70% of homes were underinsured.
Home insurance gives you the priceless opportunity to stay afloat or quickly get back on your feet following an unfortunate event involving your home – make sure that you’ve properly invested in it to get the most out of it.
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