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Home Insurance Policies: Why Buy Home or Renter's Insurance

By: Brian Hill

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Homeowner's insurance provides coverage for damage to your home from a number of perils or hazards, including such things as fire, water damage from broken pipes, damage from a tree falling or wind damage. But it also can provide coverage for loss or damage of personal property such as furniture, electronic devices and even your clothes. A third aspect of homeowner's insurance is personal liability coverage. This simply means if someone is injured on your property and you are held legally liable for the injury, the insurance company provides coverage to pay the amount of the judgment. Or it might be a case of you damaging property belonging to your neighbors; your homeowner's policy would cover that as well.

Liability coverage is vitally important to protecting your assets and providing peace of mind. Judgments in the hundreds of thousands of dollars are not uncommon for personal injuries. Without insurance, you would have to liquidate your assets and/or assign a portion of your wages to cover the amount of the judgment. This could be a financial nightmare that goes on for years.

Usually, a mortgage lender requires the property owner to have homeowner's insurance. They do this so their secured interest in the property is protected in the event of the home being damaged or destroyed. Even if this weren't the case, not having homeowners insurance is foolish from a financial standpoint, because most of us would not have the funds available to fix the damage to our home or replace our personal property in the event of a disaster such as a fire or tornado. For many people, their home is their single largest asset, and protecting the equity investment they have built up over the years is of paramount importance.

For renters, protecting personal property and being able to pay liability claims are the two main benefits of a renter's insurance policy. Many people do not realize how much it would cost to replace all their personal property. For a relatively modest premium, they can have this protection in place. You should maintain an up-to-date inventory of your personal property in a safe place such as a lockbox at the bank. This is particularly true if you have some unusually valuable pieces of furniture, for example, or jewelry of significant value.

Circumstances change and you need to review your homeowner's policy at least annually to make certain you continue to be adequately covered. During times when home values are going up, you may need to adjust your coverage to make sure it still covers the cost to rebuild your home at today's prices. You may find that you have acquired significant personal property since you moved in to your home. You may want to increase the amount of that coverage as well.

Article Source: http://depositarticles.com/

Brian Hill is the author of several commercially published nonfiction books, the novel Overtime, and is an award winning screenwriter. Get Free home insurance quotes and compare rates to get the best deal on insurance. Your credit score affects your insurance rates, Free credit report and scores.

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