What Do I Need a Home Insurance Policy?

Whether you are purchasing a new home or already have paid the home loan, you must think about having a home insurance policy. Your home is probably one of the valuable assets, and home insurance helps to protect your investment and you and your family in many ways. Here are some key factors that show the importance of having home insurance:

Importance of Home Insurance:

Generally, we think that a home insurance policy protects only the physical structure of our house. Well, this is not true, instead, it protects our personal belongings, and some plans even pay the medical bills if a guest gest injured in our home. Therefore, we are discussing the importance of a home insurance policy in a few points here:

• Provides Dwelling Coverage: If your home or any structure attached to it such as garage or deck is damaged through a peril that is covered in your home insurance policy, then it pays for the repairs.
• Coverage for Personal Property: Coverage for personal property helps to pay for the replacement of certain belongings like electronics and furniture of your home, which may be damaged or stolen through a covered loss.
• Coverage for Other Structural Damages: The other structural cover in your home insurance policy helps you to pay for replacement and repairs for detached structures of your house such as a shed or fence if they are destroyed or damaged through a covered peril.
• Coverage for Personal Liability: If your family member or you are found legally liable for damaging the property of someone accidentally or injuring somebody, then the liability coverage can help you to pay for the related cost of repairs and legal fees, also, to provide help for medical bills.
• Coverage for Personal Property: Personal property coverage helps to pay for the replacement of certain belongings like electronics and furniture that are stolen or damaged by a covered loss in your home insurance plan.
• Guest Medical Cover: If a visitor gets injured accidentally on your property, then the guest medical cover of your home insurance policy helps you to pay for their medical bills.
• Additional Coverage: If you are unable to stay at your home after a natural disaster that is covered in your home insurance policy or fire, then your home insurance policy can provide coverage for the temporary cost of living like hotel bills.  

Scenarios Wherein Home Insurance Policy Works as a Saviour:

Purchasing a home insurance policy is not required by law, but in case you have taken a home loan, then the financial institution or bank from which you have taken it, may ask you to show it. This makes sure that when you stop paying your home loan, the lender has a proper home for taking to get their loan amount back. However, this is the worst-case scenario, there are many scenarios wherein a home insurance policy works as a savior:

• Your Home Is Destroyed in an Event: There can be chances that you do not have money in your bank account to rebuild your house if it is destroyed in an event. In such a situation, a home insurance policy can help you to cover the rebuilding cost of the home and replacement cost for all your belongings.
• There is Burglary at Your Home: When your home is burglarized and you have lost some of the precious items. If you have a home insurance policy and if you have covered precious items of your home in it, then you get the cost of their replacement from it.
• A Third-Person Gets Injured in Your House and Sues You: Suppose someone gest injured due to construction in your home. He/she could choose to sue you for not maintaining proper safety while construction. If such a situation happens, then a home insurance policy can help you.

The Final Words:

It is important to keep in your mind that every cover has some limits and so does a home insurance policy. When selecting a limit for your home insurance policy, you must make sure to consider points such as the potential cost to rebuild your home or the cost for replacement of your belongings. By doing this, you will be prepared when your home or its belongings are destroyed or damaged through fire or other perils that are covered in your policy.

However, having a home insurance plan does not prevent your home or its belongings from any damage instead it provides a financial cover if some unexpected situation occurs. So, purchase a home insurance plan that is suitable as per your requirements.