A new home can be the biggest purchase of your life; but consider this: You budget to furnish your home. You house all your belongings there. It is where you live, raise your family, and make memories. Following this train of thought, your home becomes a great financial (and personal) investment, so why not protect it? Home insurance is the safety net that helps you repair, rebuild, or replace that which can be susceptible to numerous risks. Continue reading to learn the benefits of home insurance.
If you need a loan to purchase a new home, most lenders will require you to purchase home insurance (before closing). This protects the lender if your home is destroyed by a fire, tornado, or other hazard. Why does the lender need security? The lender gave you a large sum of money with the agreement that you would pay it back. Your home serves as collateral in the event you are unable to pay your mortgage. When your loan enters default, the lender has the option to repossess and sell your home to recover their losses.
Now, if your home is leveled by a disaster, the threat of foreclosure is less intimidating when there is no physical structure for the lender to repossess. Your lender will expect you to keep paying the mortgage though, whether or not the house is still standing. Your insurance policy can then protect you from paying the mortgage on a dwelling that is no longer livable. So, when shopping for a policy, keep this in mind: your lender often requires you to have at least enough coverage to cover your mortgage amount; but you might consider buying additional coverage to protect your own interests.
Home insurance (or homeowners insurance – they are the same) can cover your home and other structures (whether they are attached to the home or separate), such as your garage, garden shed, deck, or guest house. If a tree falls through your roof during a windstorm or lightning strikes fire to the pool house, your policy can help cover the cost of repair. Most hazards are typically covered, including thunderstorms, tornadoes, hurricanes, and vandalism. Often times, though, flood and earthquake coverage are separate policies at an additional cost.
Home insurance can also help you if your personal belongings are damaged or stolen. Material items typically covered include furniture, electronics, appliances, and clothing. You may need to purchase additional coverage for jewelry, furs, and artwork, since those items have greater monetary value.
The cost to repair and rebuild your home is one thing, but what about the cost for temporary housing? If your family must live away from your home for a time, the additional living expenses can quickly add up. Homeowners insurance often includes coverage for a hotel or interim housing, as well as food, laundry, and storage space. Keep in mind that the event which rendered your home temporarily unlivable must be considered a covered loss. Also, there will likely be a cap on the amount covered and a time limit on how long your policy covers temporary housing.
Accidents happen. If a visitor sustains an injury on your property, your homeowners insurance (if it includes liability coverage) can help cover the costs should the injured party seek compensation. This can be their medical bills or lost wages (should the injury cause them to miss several days of work) and even legal expenses if they decide to sue you.
Liability coverage also protects you in the event you (or your family) unintentionally damage someone else’s property. For example, if your son is playing baseball in the front yard, and his home run sends the ball through your neighbor’s closed window, you are likely responsible for replacing it. Another more severe instance may be if you left the grill on, and it catches fire to your neighbor’s property; you are responsible for damages. In either scenario, your homeowners policy can help you with ensuing costs.
Because your homeowners policy is designed to (1) cover the costs to repair, replace, or rebuild your property, (2) reimburse you for associated living expenses, and (3) help you with liability, you stand a better chance of remaining financially stable following an incident. This means you can potentially avoid or minimize unwanted debt or loss of credit, which can happen if you are left to pay for such losses on your own. This then ties into the last benefit of home insurance which is…
Knowing you are financially protected from most hazards because of your homeowners policy should be a huge relief. You may have a lot else to focus on – perhaps a mortgage, an upcoming engagement, or saving for next year’s summer vacation; so, would it not be better to have some security should the unexpected happen to your greatest investment? Less stress and worry add up to a better homeownership experience.
If you would like to learn more about home insurance and its coverage, feel free to inquire with the qualified professionals at Lennar Insurance Agency (LIA). Working together with Eagle Home Mortgage, CalAtlantic Title, and other Lennar affiliates, LIA contributes to a seamless, worry-free closing on your new Lennar home.
This article is not intended to provide any insurance or legal advice. You should consult your own insurance and legal advisors for more information about homeowners insurance generally or your policy specifically.
Lennar Insurance Agency (LIA) is an affiliate of Lennar Corporation, Eagle Home Mortgage, and CalAtlantic Title. See Affiliated Business Arrangement Disclosure. Use of LIA is not required to purchase a home from Lennar, to obtain a loan from Eagle, or to obtain title services from CalAtlantic Title.
This is not an offer in states where prior registration is required. Void where prohibited by law. Copyright © 2020 Lennar Corporation. Lennar, the Lennar logo, Lennar Insurance Agency, the LIA logo, Eagle Home Mortgage, the Eagle logo, CalAtlantic Title, and the CalAtlantic title logo are U.S. registered service marks or service marks of Lennar Corporation and/or its subsidiaries. Date 1/20.
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