Home ownership is a huge investment—probably the biggest you will ever make. In the process of becoming a homeowner, buying home insurance is an essential step. Between the time your offer is accepted and the closing date, you’ll need to provide proof that the home is insured. As you will see, home insurance is about more than just protecting the structure of your house. Read on to find out four main reasons you need home insurance.
1. No home insurance, no mortgage
Did you know that you need homeowner’s insurance to qualify for most mortgages? Before they make a financial investment to fund your mortgage, a mortgage lender needs to know that their investment will be secure. Any damage to your home before the mortgage is paid off could change the market value of the home and result in loss for the lender, so they ask for proof of insurance before they agree to lend. Once you own your home outright, or if you purchase your home upfront without a mortgage, you will not be required to have home insurance, although we certainly don’t recommend ever going without it.
2. To protect your dwelling and outbuildings
Typical home insurance policies provide coverage for damage caused by insured risks to the physical dwellings on your property including the foundation, walls, and roof of your home as well as other structures such as decks, garages, or sheds. Insured risks usually include fire, theft, hail, and wind. Protect your home and detached dwellings against other risks such as flooding or earthquake by adding extra coverage options to your homeowners insurance policy.
3. To protect your possessions
Your home is likely filled with furniture, appliances, clothing, electronics, personal belongings and other items of value. Most home insurance policies come with coverage for your possessions up to a certain percentage of the total insured value of the home. When you keep an inventory of everything in your home, your insurance company may reimburse you for the value of any items that are stolen or damaged by a covered hazard. This is why it is important to review your home inventory each year when you renew your policy.
4. For personal liability protection
Homeowner’s insurance can provide financial protection in the event that you or a family member is held legally liable for causing injury or damage to another person or their property. If they take legal action or file a claim, the insurance provider will help pay for related repair, medical, and legal costs. Simultaneously, home insurance will protect you in the event that someone is injured while visiting your home.
Examples of when home insurance may protect you:
- Someone slips and falls on your front step, breaks their ankle and needs surgery. They make a claim against you for the cost of personal injury.
- During a windstorm, a tree in your backyard falls and causes damage to your neighbours fence and shed.
- Your laptop is stolen from inside your car while it is parked in the driveway.
- A fire starts in your kitchen while nobody is home and the entire house burns down.
If you’re in the market for a new home in the Warman area, come and talk to us about homeowner’s insurance! We’re here to answer all of your questions and we’d be happy to suggest the best options for you based on your needs and budget.