In your life, if you are lucky, you may make several large investments – but for most people, the largest of these will be when they buy their home. When you are getting your mortgage you may find that you are advised that you need home insurance. In fact many mortgage lenders insist on it before they will agree to your mortgage with them and will require you pay back the full mortgage value immediately if your insurance lapses. But why is home insurance so important?
The simple reason it is so important to have home insurances is that if you are uninsured and something terrible happens to your home, for instance it is destroyed in a storm – then you not only will have lost your home, and therefore your largest investment, but you will still have to pay back the mortgage you were granted on the now destroyed property as well as continuing to try and survive. For most people this would simply be impossible to do, having home insurance helps you to avoid such financial hardships.
Although I have mentioned storms as an example of how your home could be damaged, there are many forms of damage that most home insurance policies will cover including:
- Falling trees
- Damage caused by vehicles
- Lightning strikes
- High winds
- Flood waters
- Damage by thieves
- Damage by vandals
- Subsidence, landslip or land heave damage
- Animal related damage (including birds)
- "Blue ice" or other falling objects from the sky
What you are covered for depends on your policy and which company your insurance is with. It is important to make
sure you have the right home insurance for your property, and if there is something near to your property that could impact you – you must tell the home insurance broker – for example you live near a river and therefore have an increased risk of flood damage – as failing to do so, may invalidate your home insurance and leave you without cover for things you think you are covered on.
Although with some of the things I have mentioned, like leaks or birds nesting in your building, you are responsible to pay the actual repairs themselves, often any resulting damage will be covered on your policy. The cost of repairing the leak, or getting the birds removed is often a small amount when compared to the cost of repairing the damage that has been caused.
Many home insurance policies are designed for you to claim the cost of repairs, or reconstruction of your property if it is so badly damaged that it requires this, and as an addition to this your home insurance may also cover the cost of any alternative accommodation for you and your family if there is a need for you to move out whilst the repairs are done.
Be sure to shop around when you are looking for your home insurance to get the right policy for you and your property and always read the "small print" so you are 100% certain what you are covered against.
When you sit and add up the possible costs that could be caused by some of the ways your home could be damaged, no matter how unlikely the eventuality may seem – it isn’t hard to see why home insurance is so important.