Is a Home Insurance Policy Worth It? Here’s What to Know

Home miniature

A home insurance policy is not on top of your list, right? Next to life and health insurance, car insurance will probably come next. Then, there’s the inevitable gadget insurance in case you’re one of those who usually leave their phones on the train. Certainly, home insurance is the last thing in your mind, given the multitude of insurance policies you have to write a check for.

So, why should it be a surprise to you that when your house suffers from water or fire damage, you have to shoulder the repair expenses? And even if you have home insurance, you’ll be surprised that the policy does not cover your yard or fence. What a shocker, right? Home insurance has three main functions: first, it covers repairs to your house; second, it replaces your personal belongings; and third, it covers personal liability when someone else gets injured while in your house.

Unfortunately, not all home insurance policies cover these three areas. You have to talk this over with your insurance agent, so you can find a policy that covers what you think you might need in the future. Also, comprehensive home insurance—much like comprehensive auto insurance—is more expensive than other types.

Natural Calamities

The best protection you can get from a home insurance policy is against natural calamities. Homes in areas that are frequented by wildfires and flooding need home insurance. The insurance’s dwelling coverage shoulders damages to the house itself. The insurance policy can cover the cost of rebuilding the home in case of a fire or other natural disaster. Fire damage restoration can cost thousands of dollars depending on the extent of damage to the house, so home insurance is always a welcome thing.

Personal Property

homeowner holding a miniature house

Insurance can cover the loss of your personal belongings. Most homeowners will have a list of their essential belongings in the house in case of a natural calamity or other types of damages. The insurance company will usually cover a portion of the cost of these items, particularly gadgets like mobile phones, laptops, TVs, radios, and other types of appliances.

Is It Worth It?

Many homeowners don’t consider home insurance unless the mortgage company requires it. More and more of them realize how important this is because of the vulnerability that home damages can put homeowners in. Is home insurance worth it? Definitely.

The real question, however, is how to choose the right insurance for your property. While there are plenty of options out there, it’s often confusing to pick just one type of home insurance. Do you need to pay the national average of about $2,100 annually for home insurance? Is that enough coverage?

The cost of home insurance depends on where you live and the size of your home. Some states pay a lot more, while some pay less. The cost also depends on the value of your home—large homes tend to have higher premiums.

In choosing the right home insurance, you first need to work with your agent. But beyond that, you have to know what your home needs, too. Where is it located? What kind of natural calamities do you usually encounter in your area? How’s the climate in your area? Knowing these things will help you choose the best insurance for your home.

So, should you invest in home insurance? Outside of it being one of the requirements for securing a loan? Yes, you should. It’s not just about it being a requirement, though. Home insurance protects your investment, as well as puts your mind at ease. Knowing full well that your home is protected in case of a fire or water damage will make you sleep better at night.

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