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Many people never file a home insurance claim. Others file just a few over their lifetime. This policy provides protection from liability claims as well as property damage. But, if you are not using it, is it worth making the investment in it?image of house

Is It Required?

The first step to understanding this situation is to determine the requirement to carry home insurance. A home with a mortgage almost always requires home insurance. Most property owners will sign a contract stating they will maintain comprehensive property insurance on their home during their mortgage term. Not having it could warrant fines or even a cancellation of a mortgage. In these situations, having coverage is essential.

What Types of Claims Can Occur?

For those without a home mortgage, it can be hard to justify paying for home insurance in some cases. However, it takes a single claim to create thousands of dollars of loss for the property owner. Here are a few examples:

  • A storm causes significant damage to the roof. Replacing a roof can cause $5,000 up to $15,000 or more in many areas.
  • Your dog bites a neighbor, causing significant damage to their ability to work. This could mean you have to pay for their lost income and their medical bills.
  • A fire breaks out due to an electrical failure. It takes over the home quickly. The contractors cannot repair it. You lose your entire home.

Without home insurance, these situations can be very expensive. It is very difficult to overcome a fire, for example, from a financial point of view. That's why having home insurance is important.

But, What Is Likely to Happen?

There is no way to know what will happen at your home. Even a well-maintained home can experience unexpected problems. And that's where home insurance will help. According to III.org, 5.3% of all homes had a claim in 2016. Another way to look at the risks is by the severity of the claim. For a fire or lightning claim, the average claim was over $50,315. For theft, the average claim was $4,146. Credit card fraud claims accounted for $441 on average.

These are risks. There is no way to know if your home is at risk. However, having home insurance generally cuts the financial expense you have to pay when an event like this occurs. The risks may be low, but they remain very costly when they do occur. As a result, most people should maintain a policy.

Also Read: Keeping Your Home Warm When Cold Weather Hits

Posted 10:40 AM

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