Consequences You'll Face If You Do Not Have Home Insurance
For some homeowners, having homeowners insurance can mean an additional monthly expense. For many others, getting one is a necessity. Homeowners’ insurance may require you to spend more, but it is also essential, especially if you want to protect and keep your house and personal properties in good condition for a long time. It is also vital for homeowners who plan to resell in the future, as well as for those who are applying for a mortgage.
Homeowners’ insurance is property insurance or policy that covers your house and its contents, as well as other personal possessions. Home insurance protects your home from burglaries and disasters. It may not be required by law, but it is a primary need to apply for a mortgage. If you do not have a policy, the lender can purchase one for you.
If you are one of those who think that not having homeowners’ insurance is perfectly fine, it’s time to change your mindset. Without a homeowners’ insurance policy, imagine these things happening to you (and your home):
1. Your home and personal possessions are not protected.
The primary goal of homeowners’ insurance is to protect your home and personal possessions. Coverage includes all structures within your entire property (i.e., garage, shed, or carport). Your house is your largest and most valuable investment, so it deserves all the protection you can get for it.
Without homeowners’ insurance, losing everything that you’ve worked so hard for is a big possibility.
2. When your home is damaged, you'll pay for the repairs and replacements using money from your pocket.
If your home is damaged by wildfire, a storm, or hurricanes, your insurance policy will pay for the repairs and replacements. You don’t have to reach into your pockets to pay for such emergency expenses.
You may also need to vacate your home while the repairs are ongoing, so you’ll have to deal with additional expenses such as hotel room fees, food, and transportation. Homeowners’ insurance covers all these.
So, if wildfires and other natural disasters are common in your area, you have all the right reasons to get homeowners’ insurance.
3. You may violate your mortgage contract.
Mortgage lenders require homeowners to get a policy, and those who fail to do so may violate their contract. If you insist on not getting homeowners’ insurance, your mortgage lender will get one for you, which can be more expensive or may not be a good deal because it has limited coverage.
Additionally, if you already have a mortgage but do not have homeowners’ insurance, you are bound to have problems. For example, if you fail to pay your premium and your coverage will lapse, you’ll have to pay for an amount that’s equivalent to the value of your home. If you fail to pay, you’ll get a mortgage default or face property foreclosure.
With a homeowners’ insurance policy, you won’t have to worry about problems like this.
4. You'll have a difficult time getting lenders to approve financing.
As stated above, homeowners’ insurance is one of the requirements for securing a mortgage. Lenders treat insurance as an assurance that investing in you and your property is safe. As such, whatever happens to your home, they won’t have to worry about their investment because your property is insured.
If you have a pre-approved mortgage but do not have homeowners’ insurance, you might not get final approval.
5. You won't have liability protection.
Suppose your neighbor or friends visit you and get injured while within the premises of your property; you are liable for what happened. Without homeowners’ insurance, you’ll have to use your own money to pay for hospital bills, medicine, and legal fees (if the victim files a complaint against you). The expenses pile up as the case goes on and until your neighbor or friend is completely healed. In the end, you might need to deal with an increasing amount of debts.
6. Selling your house will be a challenge.
Homes that are not insured do not sell like pancakes, and there are several reasons for this. If your home has been affected by a natural disaster or was burglarized some time ago, ensure that all the repairs are completed and replacements are in place before showing the property off to potential buyers. Otherwise, you may have to pay for doctors or hospital and legal fees when one of them sustains an injury while viewing your property.
Additionally, with homeowners’ insurance, regular maintenance and upkeep of your home and personal possessions are easier.
7. Your home will not be protected from burglary.
Without homeowners’ insurance, you won’t get protection when your personal possessions are lost because of burglary. You’ll have to pay for whatever you lost, or you’ll have to forget that you lost them completely.
A homeowners’ policy provides you with an option to regain the value of the stolen items from you. You won’t have to spend a single centavo.
8. You will end up paying more if you get home insurance at a later time.
Some homeowners prefer to buy homeowners’ insurance at a later time. This is not recommended because aside from policy prices going up, you may also have to choose a high-risk insurer. The longer you postpone getting a policy, the riskier your home becomes, and high-risk homes need high-risk insurance coverage. Thus, instead of saving or being practical, you’ll end up spending more.
If you need more reasons for buying a homeowners’ insurance policy, talk to a certified insurance representative.
By Rachael Harper