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Homeowners Insurance

Homeowners Insurance: Build Your Life on a Solid Foundation

According to the U.S. Census Bureau, roughly 64% of people in America own homes. In addition to the financial commitment, there are a lot of responsibilities that come with owning a home. Repairs and updates are costs that never quite seem to go away. This is why home insurance is so important. Many people end up refinancing and/or taking out a second mortgage on their house. It is estimated that there are currently 3 million homeowners in the U.S. who are upside down in their homes. This means that they owe more than their house is worth.

Overall, homeownership is the most significant investment that most people will make in their lifetimes. If you pour all of your life savings into one home, it is important to protect it. If something happens to your home and you are not prepared, you could stand to lose everything. If you own a home, insurance is a necessity!

Claims

According to the Insurance Information Institute, in 2016, 5.3% of insured homes had a claim.  Property damage was the reason for 97% of those claims. The majority of the financial losses resulted from damage caused by fire and lighting. Also, the average amount of these claims was about $50,000. Further, the next highest was bodily injury and property damage and then water damage and freezing. In terms of frequency, the most common cause of damage is wind and hail.

Home Insurance Needs

It is important to recognize that all homeowners have different needs based on where they live. If, for example, your house is located in a high-crime area, you might be most concerned with gaining coverage for theft and property damage. Also, your location in the country will dictate what kind of coverage you need for weather damage. For example, if you live in California, you might be concerned about earthquakes. Also, sinkholes plague homeowners in states like Florida, Texas, Alabama, Missouri, Kentucky, Tennessee and Pennsylvania. In fact, in March of 2013, a sinkhole swallowed an entire house in Florida.

Covered Events

The first thing you want to do when securing a policy is look at all of the covered events. If you are in an area with specific weather dangers, you might have to add on additional liability coverage to your policy. In addition to weather threats, you will want to consider how much protection you will need based on your assets. One way to do this is to take inventory and make a list of all your valuables. Surprisingly, in a survey conducted by the III in 2015, only 52% of homeowners had done so.

The Takeaway

When it comes to insuring your home, you don’t want to cut corners. It is important to do your research, consider the coverage you will need, and make sure you have the necessary protection. When disaster strikes, you don’t want to be left to pay for damages out of pocket. Some homeowners who do not prepare for the worst are left to completely rebuild their homes. Starting from scratch can devastate lives. Don’t let that happen to you.

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