If you own a home, you need to purchase a homeowners insurance policy. This type of insurance coverage protects you in many ways. If you would like to know more about homeowners insurance and why it's important, check out these four things homeowners insurance does for you.
1. Avoid Forced Coverage
If you are still repaying your home loan, the lender may require homeowners insurance. Even if your state doesn't require homeowners insurance, the lender can still insist upon it to protect their investment. If you don't have homeowners insurance, the lender may provide forced coverage, which can be expensive.
Forced coverage policies typically provide less robust coverage because the lender only cares about protecting their own interests. Therefore, your forced coverage policy may not cover any of your personal belongings since those don't affect the lender.
2. Protects You From Loss
Homeowners insurance protects you from loss in many ways. First, it provides coverage for the dwelling and attached structures. As long as the damage was caused by a covered peril, your insurance carrier will replace your home. However, each policy has a max payout limit, so make sure your policy provides enough money to pay for your home.
You should also make sure there is enough coverage to replace your belongings. Depending on the policy, you may get the actual cash value of the current market value, or you can get the replacement cost. Replacement cost coverage is more expensive because they pay more.
3. Covers Medical Bills
If someone gets hurt while on your property, it may be your responsibility. Luckily, most homeowner insurance policies provide guest medical coverage. Therefore, if someone hurts themselves while visiting, they can file a claim with your insurance provider to pay for related medical bills.
4. Protects You From Lawsuits
Sometimes, injuries on your property lead to lawsuits. This includes dog-related injuries. If someone sues you, and you don't have coverage, you'll have to pay for court fees out of your own pocket. If the court decides you are responsible for the injuries, you'll also have to pay medical bills. With homeowners insurance, however, the policy covers related court fees and the cost of the lawsuit.
Not only does homeowners insurance help cover the loss of items and damage to your home, but it also protects you against lawsuits. If your policy isn't robust enough or non-existent, it's time to act. If you would like to know more, contact an insurance provider in your area today.
Share29 March 2022
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