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Don’t Have Homeowner’s Insurance? 5 Risks You Must Know

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Published on October 07, 2021. EST READ TIME: 3 minutes

Homeowners insurance is perhaps one of the most overlooked and underrated insurance. Owning a home is a dream of many but that dream needs to be protected. Homeowner’s insurance protects your home and provides security against a variety of risks. Buying a home is perhaps one of the biggest expenses you will make in your lifetime. Hence it is advisable to have homeowners insurance as a shield that protects you from the expenses in the event of damages to the property.

What Is Homeowner’s Insurance?

Homeowners insurance is a type of property insurance that covers damages to your homes, valuables, and other assets. Homeowner’s insurance coverage is not restricted to the bricks and beams only. The add-ons in homeowners insurance provide repairs or financial security to your house belongings. There is a wide variety of coverages and add-ons under home or property insurance offered by banks and other financial institutions. Apart from protection to your home and belongings from damage and burglary, liability cover in homeowners insurance protects you from liability if someone is injured at your property. It also protects you and your family members from any liability in case of accidental harm to someone else’s property.

What Happens When You Don’t Have Homeowner’s Insurance?

Even though buying homeowner insurance is not compulsory, lenders tend to prefer the borrowers who have homeowners insurance. While no law mandates that you purchase homeowners insurance, the mortgage lenders require you to have it in place. One of the primary reasons that lenders require you to have home insurance is to ensure that they can recover their money in case of any disaster. There are a number of benefits you enjoy when you opt for homeowners insurance. But if you decide not to buy one, here are some of the risks that you may face.

• Pay Out-of-Pocket for Damages-

A homeowners insurance policy covers your house and your valuables. A homeowner without the cushion of insurance has to pay for the damages out of his pockets in case of a disaster or an accident. Homeowners insurance is an investment that pays off in the long run.

• Unprotected property-

Homeowners insurance is underrated because it is often misunderstood. Not many are aware of the fact that it protects more than the structure of the house. It provides cover for your valuables such as jewellery, furniture, electronic goods, clothes, etc. Anyone who does not have their home insured needs to bear the cost of interior or exterior damage caused to the property due to theft, vandalism, electrical fire, or the damages resulting from a natural calamity.

• You Have No Liability Protection-

If someone visiting you is injured at your home, liability cover provides the cost of medical expenses or the cost of repair to any damage caused to their belongings at your property. The expenses tend to mount up when dealing with the injury caused to a visitor at your property. From medical bills to legal defence fees, you will have to take care of all these expenses if you do not have homeowners insurance.

• Unsecured Financing-

Homeowner’s insurance is required by the lenders to protect their investment. In case of damages caused to the property resulting from natural disasters such as hailstorms, lightning, hurricane, or theft, vandalism, electrical fire, etc. home insurance safeguards lenders and insured against any financial losses.

How to find the best home insurance according to your needs

Once you are aware of the benefits of home insurance the next step is to find the one that suits your needs the best. Here are some of the key factors you need to keep in mind while deciding on the best home insurance for you.

• Understand the value of home insurance

• Evaluate your needs

• Explore the home insurance options available in the market

• Check the claim settlement ratio of the lender

• Choose the add-on riders to extend the policy cover

Conclusion

Homeowner’s insurance is not mandatory and you might be inclined to put off buying it to save money. But the several risks mentioned in this blog might help you to reconsider. As they say “It’s better to have it and not need it than to need it and not have it” and it fits perfectly in the case of homeowners insurance.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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