Yes, homeowners insurance coverage is essential and required for many homeowners.
Let’s look at what homeowners insurance coverage does for you, why you need it, what it would cover, and whether it’s the only home protection plan you should consider.
What Does Homeowners Insurance Coverage Do For You?
Homeowners insurance helps protect you, your home, and your budget against certain external events, such as fire, theft, weather damage, and vandalism.
For many people, their home is the biggest investment they have. Homeowners insurance coverage helps protect that investment if something went horribly wrong.
Why Should You Have Homeowners Insurance Coverage?
There are two major reasons why you should have homeowners insurance.
1. Lenders require it
Nearly every mortgage lender will require you to purchase and show proof of homeowners insurance before they agree to finance your mortgage. In other words, you likely cannot get a mortgage unless you agree to purchase homeowners insurance and keep it active.
If you let your homeowners insurance lapse, your lender can move your mortgage into default or purchase homeowners insurance themselves and send you the bill.
2. You could lose everything without it
Your home is likely your biggest investment and biggest potential source of wealth. Without homeowners insurance, if something were to damage or destroy your house, you'd be on the hook not only for the repairs but also for any remaining amount on your mortgage.
Homeowners insurance coverage provides a safety net against certain external events, both inconvenient and catastrophic, that could protect you and your budget when these events occur.
What Does Homeowners Insurance Cover?
Homeowners insurance policies vary in their coverage and scope. We strongly recommend that you review your policy or speak to a homeowners insurance expert for precise information about coverage.
That said, homeowners insurance generally covers the following events:
- Fire damage
- Certain weather events, such as wind or hail
- Vandalism
- Your liabilities if someone is injured or dies on your property
Is Homeowners Insurance All You Need?
While it can save you a ton of expense caused by unexpected damage, home insurance does have its limitations. Depending on the state where you live and your specific policy, your homeowners insurance plan may not cover:
- Damage due to floods, earthquakes ,or mold. You might need separate coverage.
- Foundation problems and other forms of structural damage.
- The full cost to replace certain valuables, like jewelry, art, or collectables. You may need to purchase additional coverage for these items if their value exceeds certain dollar amounts.
What’s the Difference Between a Home Warranty and Homeowners Insurance Coverage?
Yes, home insurance and a home warranty are different things.
- Home insurance covers events like fire, theft, weather damage, and vandalism
- A home warranty helps reduce the costs to address covered breakdowns to covered systems and appliances.
A home warranty covers many routine breakdowns of appliances, but there are some exceptions. Here’s one example: if your refrigerator breaks down due to a house fire, your home warranty wouldn’t cover it. Instead, you’d contact your homeowners insurance company. That’s a good reason to consider both a home warranty and homeowners insurance.
Summary
The more you look at the numbers, consider the possible consequences, and think about the value of peace of mind, the more having homeowners insurance coverage makes sense:
- Your home is your biggest investment.
- Lenders usually require homeowners insurance.
- Homeowners insurance covers damage caused by fire, storms, wind, and lightning; certain living expenses if your home needs to be repaired or rebuilt; and certain liabilities if someone is injured or dies on your property.
- There are several things that homeowners insurance doesn’t protect you against. You should be aware of what’s not covered.
Combine Homeowners Insurance with a Home Warranty
Combining your homeowners insurance coverage with a home warranty from 2-10 Home Buyers Warranty (2-10) is a strong strategy for protecting your budget against unexpected, covered problems.
With a 2-10 home warranty, you can protect your budget against expensive, covered breakdowns, which are generally more common than catastrophic events that home insurance covers.
Get your free quote from 2-10 today.
