5 Advantages and Disadvantages of Having Home Insurance

5 Advantages and Disadvantages of Having Home Insurance

Purchasing a new home is a big decision, and that’s why it is exciting but also stressful. It can take a considerable amount of time and savings to get to the point where you can afford to take out a mortgage and buy a home. Since this is a huge financial investment, it is very important that you also purchase home insurance. However, like any other type of insurance, home insurance has its own advantages and disadvantages.

5 Advantages and Disadvantages of Having Home Insurance

Understanding what they are can help you decide whether you should purchase one or not. Read on to learn more about home insurance, including the pros and cons that it has to offer.

What is Home Insurance?

Home insurance is an insurance policy that covers the costs and damage to insured property, such as your home. It’s a necessity that protects your home and possessions against theft or damage. Usually, the policy covers interior damage, exterior damage, damage or loss of personal assets, and injury that arises while on the property.  

Typical types of home insurance policies include comprehensive, basic, broad, and no-frills coverages. They differ depending on a list of factors including the type and size of the residence, age, replacement value, etc. Make sure you look for a brokerage with competitive rates, where you can get multiple quotes for home insurance that best suit your needs and preferences. It’s always a good idea to look around before you decide to purchase one.

Types of Coverage

One of the most inclusive home insurance policies is comprehensive coverage, which covers both the house and its contents for all risks, except for those that are specifically excluded. A basic, or named perils policy can help you save money, however, it carries the financial risk of some losses, as it covers only those perils that are specifically stated.

A broad insurance policy, on the other hand, is a mid-priced compromise between comprehensive and basic coverage. It provides coverage for the home and named perils coverage on the contents.

Advantages of Having Home Insurance Coverage

One of the best things about having home insurance is that it covers significant damage to your home. It protects against damages that most people wouldn’t be able to cover out of their own pocket. Damages such as fire, flood, lightning, and explosions are just a few examples of the protection offered by home insurance policies.

Advantages of Having Home Insurance CoverageProtects Your Detached Structures

It’s good to know that insurance policies also provide coverage for your detached structures, such as garages, fences, sheds, a dog house, and more.

Usually, these structures are covered at up to 10% (or another percentage) of the coverage limit for your main dwelling.

However, you can customize the policy if you want to add coverage for detached structures on your property.

Protection From Lawsuits

For instance, if someone sustains an injury while on your property, you will not be legally liable to pay the costs of that person’s medical bills. This is quite beneficial because medical bills can cost thousands of dollars, which means that this aspect of home insurance is a huge advantage.

Disadvantages of Having Home Insurance

The Cost

One of the main reasons why people are wondering whether to purchase home insurance or not is because home insurance can be expensive. The premiums, which need to be paid each month can be quite high, and the cost to maintain the insurance policy is substantial. The premiums are high due to the low deductible that you’ll have to pay if you need to make a claim.

Terms and Conditions

The fact is, there are a few hidden costs of home insurance that policyholders are unaware of because they’re buried in the terms and conditions. Working with a reliable real estate agent or a broker, however, may help you figure out what these hidden costs are, so you can negotiate.

Does Not Cover Everything

Keep in mind that home insurance doesn’t cover every type of damage that your home sustains. Some damages incurred by storms and flood damage in some areas, may not be covered by the policy. That’s why it is very important to read up on what each policy specifically provides coverage for, so you can rest easy knowing that your home is protected from certain damages.

Final Thoughts

Opting for a suitable policy is a big decision homeowners need to make, so being aware of the pros and cons might help you choose the right one for you. Remember, when shopping for a policy, get multiple quotes and consult with a reliable broker or a real estate agent to decide on a coverage that works best for you. Also, you can check with any insurer you’re already working with so you can get a better deal or a discount. 

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About the Author

Top Wellington Realtor, Michelle Gibson, wrote: “5 Advantages and Disadvantages of Having Home Insurance”

Michelle has been specializing in residential real estate since 2001 throughout Wellington Florida and the surrounding area. Whether you’re looking to buy, sell or rent she will guide you through the entire real estate transaction. If you’re ready to put Michelle’s knowledge and expertise to work for you call or e-mail her today.

Areas of service include WellingtonLake WorthRoyal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres, and more.

5 Advantages and Disadvantages of Having Home Insurance

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Michelle Gibson Wellington Florida REALTORMichelle Gibson of the Hansen Real Estate Group Inc is a full-time REALTOR who has been specializing in Wellington Florida real estate since 2001. This veteran of the real estate industry has expertise in technology, marketing, and social media.

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Hansen Real Estate Group Inc. is a full-service real estate brokerage specializing in residential real estate. As a customer-focused, quality organization, we achieve success one client at a time. Call 561-333-0446 or e-mail me today at [email protected]

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