House on fire--hopefully insured. | U.S. Forest Service | Public Domain Image | Wikimedia Commons
Your home is a large investment and has a great deal of value. You either have a mortgage on your home or own it. Either way, homeowners insurance is a wise idea.
Mortgage
If you have a mortgage on your home, the lender will likely require that your home is insured. In many instances, the lender can factor the cost of insurance and taxes into your mortgage to ensure that it is paid. In this situation, the lender pays the insurance and the property taxes and you make one monthly payment to the lender. Lenders may also require home insurance for other types of loans as well, such as a home improvement loan or a line of credit.
Ownership
If you own a home with no mortgage on it, you’ll still have to budget for certain things. Once you’re done with a mortgage, you need to make those home insurance payments and save monthly to pay taxes. Without insurance on your home, you could lose your primary asset very quickly.
Types of Insurance
Speak with your insurance agent regarding types of insurance. You may want more than is required by your lender. Items like flood insurance are usually separate than regular homeowners insurance policies. Know what your policy covers and add on if necessary.
Save by Bundling Insurance
Companies that offer multiple types of insurance frequently offer discounts for bundling insurance. If you already have auto insurance, the insurer will usually give you a discount for purchasing a home insurance policy or another car. Consider using one insurance agency for ease of payment—and to earn an overall insurance discount.
You can also save money on your home insurance in other ways—by adding an alarm system, keeping a high credit score and comparing insurance policies.
April 8th, 2010 at 8:34 pm
Great post – so very true..)),
May 12th, 2010 at 12:29 am
There’s definitely something to be said for opting for higher coverage levels than are required. Even though my homeowners insurance company is being a bit of a pain right now, at least I have the peace of mind that my coverage limits will more than cover my repairs and personal property losses from my recent house flood…Once the insurance adjuster stops “overlooking” half the structural damages and adds them to his report, that is.