Many people make investments in order for them to save for the future. The most basic and most fundamental point behind any insurance contract is to cover one in an event of loss and make him/her financially stable again. For first time home buyers, this looks great and awesome, but what they really do not know are the many hazards that comes along with the purchase. Houses are very susceptible and open to many risks that are usually uncalled for. Therefore, you need to make sure that you up your game by getting a homeownership, insurance contract that will cover you in an event of loss.
Importance of homeownership insurance cover
In most cases, if you purchase a home, you are strongly advised to acquire a homeownership insurance cover. May be it is time that you ask yourself why you are so advised. Many people do not take into details the importance of this cover and instead when they are presented with the papers the just sign below the dotted lines. It is important that you get to understand the terms of the policy.
- Coverage of the home itself
In an event of loss or damage, the homeownership insurance makes sure that you are fully protected and compensated. Sometimes the loss that will occur around our homes leaves us in a bad shape that we cannot be able to recover fully alone. This insurance cover comes in handy by ensuring we lose nothing. Therefore in simple terms, homeownership insurance is there to make sure that you are not left homeless in case some disaster strikes your house.
- Coverage of the personal properties
When a peril, like fire happens, there are usually many goods in the house that will go down together with the fire. The homeownership, insurance cover ensures that your personal properties are well replaced. Even if you feel like you do not own much, at least the little that you have will all be replaced and this is the good thing about this homeownership insurance cover. It will give you a home and all what you had lost will be covered for.
- Coverage of other liabilities
Sometimes accidents happen and you will find that another person is hurt while on your property. Well, another case is that your pet might cause injuries to a third person. All these accidents are catered for on the side of this homeownership insurance cover. You don’t have to worry about anything. This policy ensures that the damages and injuries caused to other people are covered for.
- Manages the mortgages needs
If you happen to hold a mortgage for your home, one of the fundamental requirements is the homeownership, insurance cover. Most of the mortgage lenders feel financially obligated to your home and therefore the more reason to have a homeowners insurance cover. Therefore, if you have the homeownership insurance, the mortgage lenders will find it easier to lend you a portion of what they have.
Obtaining the homeownership insurance cover
If you already know the benefits of this contract, then you will be bothered to obtain it. However this process is not an easy one. Research and statistical data show that every year the premiums rise significantly. Though the homeowner insurance industry is very large, chances of getting a HOI can be challenging. This insurance policy requires much determination and effort to get. Even in earlier times, this cover was still a hard one. The result of the rise in premiums has made the prospective home buyers opt for other choices like renting homes rather than buying. Therefore, if you are that determined to own a home, then you should be aware of the high premiums that the cover comes with. Therefore, choose to make the right decision.
Traps You Need to Avoid
When you have bought a home, and already acquired the HOI, then you realize that you cannot afford the premiums easily and still manage to pay other bills. The result of this is that you will be tempted to cut down some of the covers that this insurance comes with.
At this point you are tempted to drop any coverage of this policy. This is very dangerous as far as HOI is concerned. It is true that this policy might seem a burden, but even if you feel under pressure do not drop some of the coverage this policy offers.
There are other ways you can save more and still not drop even a single coverage. As for your savings, raising your deductible might do you good. Research has proven that raising deductibles helps to lower the cost of the premiums and the result you get are more savings. You do not have to lower your coverage; all you have to do is think of better ways to spend less but save more.
You should not be afraid to buy a house due to the theories surrounding the purchase, like the costs being very high. Considering all the perils that the contract is covering, the premiums are nothing and to add to the point, you can also significantly reduce the cost of the premiums by raising other features like the deductibles. Therefore, as far as the home buyer is concerned, this insurance is very important. Go ahead and buy your dream house, fearlessly. Send me an email now at firstname.lastname@example.org and we can get started. The Power Is Now!
Eric Lawrence Frazier, MBA
President and CEO