Buying Home Owners Insurance

Buying home owners insurance is one of the smartest financial investments a person can make to protect a house, oftentimes a person's largest and most valuable asset. When buying homeowners insurance the owner then is covered for much more than they may realize. Being insured covers the structure of the buildings and any liability against lawsuits that might be the owner's fault. Along with purchasing a policy, the owner probably will discover some added benefits in the policy such as insuring personal possessions (whether or not they are on-site or out of the house), liability lawsuit court costs, no-fault coverage for smaller liabilities, and even additional costs of living if the house is destroyed and help is needed paying for hotels, restaurant tabs, and more.

This type of policy is not just for those who own a house, but also for those who live in a rental or condo. Regardless of whether someone is an owner or renter, buying home owners insurance gives three options. People will be purchasing insuring policies for actual cash value, buying them for replacement cost, or buying them for a guaranteed or extended replacement cost (the best if one can afford it). If someone thinks of these policies as a necessity, that person won't flinch when finding out that buying homeowners insurance can be expensive, depending on how thorough the coverage is.

However, there are benefits as well. If something horrible happens, buying home owners insurance for the house's actual cash value will give replacement value minus depreciation--not enough to rebuild but enough to start over somewhere. Buying homeowners insurance at replacement cost will pay for rebuilding with no deductions for age of the home or property. Finally, the owner can extend their coverage so that they can rebuild, replace, and even pay any new ordinance laws for new construction.

Purchasing a policy is only required if the house is financed through a mortgage lender. If so, the lender will require buying homeowner insurance to meet the requirements of the loan. Otherwise the lender could lose all he has invested with no guarantee against a loan default if the owner decides to walk away from a home that they can no longer afford to upkeep or repair. Those who live in an area that floods, will want to consider buying home owners insurance with extra coverage. However, even if there are no requirements for purchasing a policy, it wouldn't be prudent to let the protection lapse or risk losing everything: "He that hadleth a matter wisely shall find good" (Proverbs 16:20). Insurance companies won't cancel a policy that has been in force for more than 60 days unless the premium is not paid, or if the person committed fraud, or lied when purchasing the policy to insure a house. Renewal is different. When it's time to renew, either the owner or the insurance company can determine that purchasing a different policy elsewhere is advisable.


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