Is Homeowner Insurance In More Important Than Ever?
The goal of homeowner insurance is to help the owner retain their financial stability in the event of loss or damage. In return, the owner agrees to pay a small fee to the insurance company in exchange for the company bearing the financial burden of any repairs that stem from damage to the home in the future. So, in other words, property insurance will shield you from the financial burden associated with repairs arising from damage by either a natural disaster, fire, or flooding.
Today it has become more important for homeowners to have insurance than it ever was in the past. One reason for this is that the pandemic has left many people being financially stranded. So, for instance, if an old tree fell on their home and damaged the roofing, many may not be able to bear the cost of getting it repaired without the insurance company stepping in.
What Does Your Home Insurance Policy Cover?
You will want an insurance policy covering the cost of repairs either at actual cash value (ACV) or its replacement cost. If we were to choose between the two, we’d say that replacement cost is better. That means if your roof was damaged and it requires complete replacement, the replacement cost will be borne by the company minus your deductible, whereas if you had ACV, you would be paid by the company what the roof is estimated to be worth when damaged. In other words, ACV means you get paid less as compared to having the replacement cost covered.
In today’s world having replacement cost coverage means that you might not have to pay a dime out of your pocket to repair any damage to your property. That means no financial burden, and there is no need to worry about not having a steady income source to cover the cost of immediate repairs.
Do You Have Liability Coverage?
Homeowner insurance, in addition to covering the value of your home, also covers the adjoining property. Many policies include a provision meant for liability coverage. While you might think it isn’t essential, the fact is that you still need it because if your neighbor’s property was damaged because something went wrong on your property, then this has you covered. For instance, if the neighbor’s property catches fire because you may have left the charcoal grill unattended, you are liable to pay for their damages. But if you have liability insurance, the company picks up the bill. The same goes for if anyone is hurt on their property.
Check your policy to find out what is and what is not covered. If you don’t have liability insurance, you should think about adding it to your policy.
Homeowners insurance is something that many people tend to overlook. However, now with so many people facing tough times, it might be a good idea to take a second look at your coverage. If anything, it will help protect you from the sudden financial blow that comes with property damage.