3 Reasons Why Homeowners Insurance Is Absolutely Essential
If you are planning to buy a home for the first time in the near future, you may be overwhelmed with the number of requirements and obligations that go along with the purchase. Because of significant upfront costs involved in the home buying process (such as the down payment and closing costs), many people ignore additional costs such as homeowners insurance. Yet homeowners insurance is absolutely essential, and choosing to not enroll in a policy can have significant consequences. Keep reading below to discover just a few of the biggest reasons why you should prioritize homeowners insurance from the moment you start looking for a home.
Getting a Mortgage
Very few individuals are able to buy a home in cash; the vast majority must apply for a loan through a mortgage lender. Whatever the terms of the mortgage, you can be sure to expect that homeowners insurance will be a prerequisite to being approved for the mortgage. It is important to note that this is true regardless of the laws in your state, as many states do not have specific laws on the books regarding homeowners insurance. If you are not able to prove that you have purchased a policy through a homeowners insurance broker, then you will either be denied the mortgage or enrolled in an expensive forced coverage plan.
Maintaining Liability Coverage
Even if you are someone who plans on paying for their future home in cash, you should still enroll in a homeowners policy, as the benefits of a good policy extend far beyond mortgage approval. For example, if someone injures themselves on your property, they may try to sue you for damages. Without homeowners insurance, you may be responsible for the full extent of their medical bills, lost wages, and other relevant damages. This can easily add up to an amount far greater than the lifetime cost of a policy.
Covering the Loss of Stolen Goods
One of the best aspects of many homeowners policies is that they cover more than damage to the house and injuries that other people may sustain on the property. They also provide for cases of a break-in or robbery in which some of your possessions are stolen. As long as you document your purchases by keeping receipts and presenting them to the insurance company, you can receive replacements or the cash value of the items. For especially valuable items, be sure to ask your homeowners insurance broker about applicable add-on policies.
