Insurance Line

Paid off your mortgage or bought your home outright.

Home Insurance – Why Should I Bother?

As the old adage goes, there are two certainties in life: death and taxes. However, there are many people who would argue that this is entirely too simplistic. Any adult will be able to provide you with a whole list of other certainties that they can’t get away from, with many of these involving the need to put your hand in your pocket. Bills, bills, and more bills!

When it gets to a stage when your expenses are so high that you only ever seem to be working, it makes sense to consider ways in which you might be able to save a few bucks. Most people would start by looking at all the costs that could be considered extraneous – retail therapy, take-outs, daily coffees, extended cable package.

Once you look at all those, you might be tempted to consider the necessaries – the costs that appear to be non-negotiable. In many cases, it means looking at things differently, such as the refinancing of a mortgage, taking on a room-mate to share the rent, trading-in the car for one that needs less gas. However, others aren’t so simple.  

If you have never made an insurance claim (and have probably not even looked at your policy documents again after it was incepted), it is easy to assume that insurance is not all that necessary after all. However, there are a range of reasons why this is an incorrect assumption to make.

The Consequences

In order to understand the importance of having insurance, it is necessary to start by looking at the potential consequences of not having it.

Come with me on a journey to the island of Catastrophize (it is so a word – look it up!) where you will discover the mythical beast known as the worst-case scenario. Though it is rarely-seen, the beast does actually exist and will shock you with its scary appearance and ruinous ways.

Okay, let’s end the fairy tale there and get back to reality because it is important to recognize what can happen to your home in real life.

Consider the occurrence of a total loss, which is where the property has been destroyed to the extent that the entire value is lost, rather than a repair being all that is necessary. Do you have sufficient funds to be able to re-build from scratch or buy a new house? If so, what are you doing reading this article? I would have thought you’d be too busy either working all hours or sunning yourself on the beach of some exotic locale. Anyway, I’m glad you are reading – hopefully, you’ll discover something useful.

Even if you could afford it, why would you want to? There has got to be plenty of more worthy uses for your money – nice vacation, new car, top up your savings pot, kid’s college fund.

Bear in mind that the premium is not going to make nearly as big a dent as paying for a new house yourself.  

The Illusion

It is possible to delude yourself when it comes to the need for insurance – sound harsh? Maybe you could call it denial, burying your head in the sand, putting the blinders on, even looking through rose-colored glasses – sounds nicer, but doesn’t make it any less true.

This may especially be the case If you have paid off your mortgage or bought your home outright. If you don’t have a mortgage company insisting on the property being insured to protect their interest, then you would be less likely to think of it as a priority.

But what about your own interest?

The purchase of a home will probably be the biggest single investment that you will make in your lifetime, and you need to protect it with home insurance for the sake of yourself and your family.

If you consider the possibility of an insured risk occurring too remote, you might be tempted to cancel your policy if you are looking to save money. Or not bother getting one at all.

Much like the introduction to the fairytale earlier, it is easy to be comforted by the idea that you will not be affected by something that rarely ever happens. However, you should also bear in mind that many fairytales originated from what were basically horror stories (we’ll leave aside the fact that they are fiction anyway.)

Though the possibility of an insured risk actually occurring might be low, this does not mean that it is non-existent. And if it does occur, it certainly can be a horror show. Not only is it possible for the structure of your property to suffer damage, but also your contents. Always remember that the potential for total loss is ever-present. 

Are you really willing to take the risk?

Even if you can afford to start again if you lose all of your belongings as well as your property, it is just good sense to operate on the basis that the money would be better spent elsewhere; read: make sure you have sufficient insurance in place.

The Reality

In reality, though the risk of a total loss occurring many be remote, it can still happen. You know all those people who you see on the news, standing outside the ruins of their home, insisting “I never thought it would happen to me.” Yep, that could be you.  

You can be as cautious as you like and follow all the right steps to ensure you have a safe home, but accidents/acts of God/natural disasters happen and you can’t fully prepare for everything.

Insurance will be especially relevant if you live in an area that is prone to flooding, forest fires, or storm events like hurricanes or tornadoes as the risk of a loss occurring is heightened. You should ensure that you have insurance in place that is suited to your region to take care of things should the worst happen.

Even if you live in an area that is not subject to extreme weather events it does not mean you are in the clear. Consider, for example, a house on a corner plot with a fenced yard and what would happen if a driver takes the corner too fast and spins out. Not only could the fence be destroyed, but there is the potential for the car to collide with the house. Another risk could arise in freezing temperatures where your path has not been fully cleared and a postal worker slips over as a consequence. What if someone breaks into your house while you are on vacation?

This is just a handful of examples and not even the half of it. Take a trip to Catastrophize and think about what else could happen to your property. A financial loss can result after anything from a minor accident to a major disaster, and insurance can provide assistance in a wide range of circumstances.

The Benefits

If you’ve never previously made a claim, the benefits of insurance are not immediately evident. Essentially, it is only a theoretical benefit… and theories can be disputed.

If you have previously made a claim, you will be more clued up about what insurance can do, but you can still feel aggrieved at having to pay the premium. However, once you take into account the benefits that can be gained from home insurance, it might make you feel a little better.    

Homeowner’s insurance provides you with the means to get some recourse if you suffer a loss following an insured risk.

After undertaking a minimal amount of work (which Econosurance can make even easier) by completing a short application, you can enjoy peace of mind from the knowledge that your property is safe.

Whether you pay the entire premium in one go or by regular automated payments, once you have the policy in place, you won’t have to worry about it (as long as you make sure the entire premium is paid!).

Without home insurance, you will always have something to worry about, whether you are inside or outside of the home, and you won’t have anywhere to turn in the event that something bad does happen.

While you might be on a tight budget, it will be so much worse if your home suffers a catastrophe that is not covered by insurance.

Fortunately, Econosurance can help alleviate your concerns as we can give you advice on getting homeowner’s insurance that will meet your needs. We’ll take your ticket, we’ll show you to your seat, we’ll do it all! Give us a call on 800-335-0633 to find out how we can help you keep to your budget.

 

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