In life, you can’t predict when something unfortunate can happen to you, your family, or your assets. This is why insurance packages exist for every type of emergency or event to ensure you are covered and can have a financial safety net in case an event puts them in a position to lose a significant amount of money.
Aside from the popular insurance packages like health insurance or life insurance, there are also insurance policies focused on your home. Here are three property insurance policies you might want to consider buying to protect your home (and your household’s finances) from financial difficulties.
As FEMA puts it: anywhere it can rain, it can flood. In 2019, the United States suffered enough floods to cause 3.75 billion dollars’ worth of property and crop damage. And it doesn’t take one of those rare extreme floods to damage a home; according to The Balance, one inch of floodwater can cause $25,000 worth of damage to a home.
Floods are fairly common in the United States that it accounts for 90 percent of all US natural disasters. If your home is in an area prone to storms and flooding, flood insurance can help pay for the damages to your property and your belongings should a flood ever hit your home.
Homeowners insurance covers the interior and exterior property damage, lost or damaged assets, and injuries that arise while on the property. Around 85 percent of homeowners in the US have homeowners’ insurance. While homeowners insurance is not required for all homeowners, banks and private lenders often require homeowners to have this policy to protect the property.
Different types of homeowner insurance policies have varying liabilities. Depending on the insurance policy, homeowners may still have to pay a deductible, or the out-of-pocket cost. The higher the premium is, the lower the deductible will be for the homeowner.
If you’re only renting your property, your landlord may have required you to already have this on-hand as more landlords prefer tenants with renter’s insurance. In case a flood or fire affects the home, landlords must have their own insurance policy ready for a natural disaster. Their insurance policy will cover your home. But their insurance policy will not cover anything else inside your home that belongs to you.
Renter’s Insurance generally covers your personal possessions, liabilities, and can give you additional living expenses during this time. Ideally, renters should have enough insurance coverage to cover all their personal possessions, especially their valuables. This also protects renters from lawsuits against people who may have incurred a bodily injury on the property.
You can never predict when a natural disaster or accident could damage or completely destroy your home. You might be financially stable now. But is your household’s income and savings capable of taking in a huge financial hit that will damage your home and your property? While insurance isn’t a hard requirement for owning a home. It’s good to be covered and ready in case the worst happens.