5 Ways Home Insurance Can Help You Stay Debt-Free

5 Ways Home Insurance Can Help You Stay Debt-Free

5 Ways Home Insurance Can Help You Stay Debt-Free

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Your first home can be your greatest source of pride and happiness – or the biggest reason why you are or will be wallowing in debt for years to come.

Taking out a mortgage or housing loan to buy your dream home will leave you in debt to the lending company for the duration of the repayment period. You need to pay your monthly fees on or before the deadline to avoid charges and interests.

If you rushed to buy your home and failed to check it thoroughly or have it inspected by an expert (a must if you are investing in an old property), paying for future repairs, improvements, and renovations will lead to additional expenses. If you don’t have any funds allotted for these emergency projects, you will likely use your credit card or take out another loan to pay for them.

Getting home insurance allows you to be financially prepared for these emergencies and unexpected expenses. With the right coverage, which you can obtain if you compare home insurance companies and products meticulously, you will avoid falling into a debt trap that usually comes with being a homeowner.

Benefits of Getting Home Insurance

Below are the top five reasons why you should get home coverage and how it can help you avoid incurring more debts:

1.     It provides protection from damage caused by natural calamities

Regardless of the natural disaster, whether it’s a tornado, hurricane, forest fire, or high winds, as long it is a covered risk, your home and its contents will always be protected by your insurance.

As such, if your roof is blown away by a tornado or your windows are shattered due to a strong storm, you can have them replaced or repaired using the money you will get from your insurance.

Having them replaced or repaired will cost you a considerable amount of money, whether you have an emergency fund or not since your savings may not be enough.

If you don’t want to incur more debts, get home insurance as soon as you buy your new house. This is something that you have to prioritize if you live in a place prone to natural calamities.

2.     It covers damage on other structures

If your home is surrounded by large fences or has a swimming pool, outdoor kitchen, gazebo, or a detached garage, having them repaired or replaced can also be pretty expensive when they are ruined by a natural disaster.

With the right insurance plan, though, you won’t have to pay entirely for their repairs or replacement. When you have other structures coverage, the policy will cover a portion of the amount of coverage you have on the building of your house provided the cause of damage is a covered peril.

Because of this particular coverage, the amount you will spend on paying for these projects will be lower. If the insurance premium is high, the plan may be able to cover the full repair or replacement.

If it is not, your savings may be enough to cover the extra costs. You will then avoid the need to use your credit card or take out a loan.

3.     It covers losses due to theft and vandalism

The last thing you want to see when you arrive home from work or a holiday is your fence, walls, or doors splashed with paint or covered in graffiti.

A worse scenario would be to find out that your house was broken into, and the intruders damaged many of your furniture. They even stole some jewelry, appliances, and other valuable items.

Home insurance offers protection against damage and loss caused by vandalism and theft. As long as you choose the right plan, your policy can recompense you or provide defrayed replacement for stolen or broken personal belongings.

To avoid dipping into your savings to pay for repairs and new furnishings and appliances in the event of a home invasion, get home insurance as soon as possible.

4.     It provides additional living expenses

In case your home becomes uninhabitable because of a natural catastrophe or home invasion, and you need to stay at a hotel or holiday rental while your house is undergoing repair or renovation, you will end up paying a fortune for this. If you will be eating out a lot, you will likely incur more debts as well.

This is a problem that you will never have to face if you have home insurance.

As long as you choose a plan with alternative accommodation, your stay at a hotel or any type of accommodation will be paid for by your insurance company while your home is uninhabitable.

However, to enjoy this benefit, the cause of the damage to your home should be under the covered claims you selected in your plan.

5.     It offers protection against liabilities

Accidents can happen anywhere, and they can occur inside or outside your home. You have to be financially prepared for such eventualities.

If your neighbor’s child fractures his arm from playing in your background play set or a guest slips on the pool deck and hurts her back, you may be held legally responsible.

Liability coverage, which you can add to your home insurance policy, will cover you against any lawsuits for bodily injury that occur in your home. It will pay for legal representation in case you get sued.

It will also cover medical bills and lost wages and cover damages that you have the responsibility of paying.

To avoid falling into further debt to pay for legal and medical fees due to accidents that happen in your property, get home insurance.

Experiencing all these benefits will depend largely on the plan you will get. Make sure you get the best home insurance quotes and study each product carefully, so that you can choose the right one that will protect you and your home and keep you debt-free while doing so.

Chris Tiemann

Chris Tiemann started his career at the age of 21. He now writes and shares his knowledge about building wealth with through real estate, and also shares an interest in investing, personal finance, and economics.

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