Home insurance also called property insurance, provides coverage for your private home or commercial building and compensates you in the event of a loss. If your home is burglarized or is partially or destroyed by a cause that is covered by your policy, home insurance will help you replace your belongings, repair your home, or even rebuild.
The value of your home and the amount of coverage you purchase will largely dictate the amount you pay for your premiums. But there are other factors that can affect your premium as well, the security in your home and how many claims you have filed in the past.
Home insurance is important for a variety of reasons:
• If you’re insured, any significant repairs or rebuilding after a disaster can potentially be covered by your insurance policy, up to your set limits.
• If you owe money on your mortgage and your home is completely destroyed, you will still be required to pay your home loan, unless you have adequate home insurance. Home insurance can help pay for the rebuilding cost. If you insure your house at rebuilding value, you will have the means to fully rebuild, if needed.
Home insurance is not required, but your mortgage lender will typically require coverage in order to provide a home loan. Even if you own your home outright and you are not required to buy home insurance, it’s still a good idea to protect your investment with an insurance policy. That way you can get the financial compensation you need to repair of rebuild after a loss.