Why Do I Need Home Insurance?

Why Do I Need Home Insurance?

Why Do I Need Home Insurance?

Homeowners insurance can help provide a financial safety net when the unexpected happens. It can help you protect what’s likely your most valuable asset, your home, if something like a fire or storm causes damage — or even destroys it. Without home insurance, if a windstorm rips off part of your roof or a toilet hose springs a leak and floods the house, for example, you’d have to pay for all of the repairs and rebuilding out of your own pocket.

A home insurance policy covers more than just your home itself. Typically, a homeowners policy can also:

  • Help cover damage to other structures on the property, like a fence or garage. 
  • Help replace your personal belongings — furniture, clothing, electronics — if they’re damaged, destroyed or stolen. 
  • Help cover your increased living expenses if you need to temporarily relocate because of damage from a covered event. 
  • Help you protect your finances with liability coverage. If someone is hurt and it’s your fault — say a visitor slips on your icy sidewalk and hits their head — this coverage helps pay medical and legal costs. If someone’s property is damaged — for example, if your child hits a baseball through a neighbor’s window — this coverage can help pay to repair or replace it.

Homeowners insurance isn’t required by law, but your mortgage lender is likely to require at least a minimum amount, to protect their investment. You may decide that you need more than the minimum, depending on the value of your home and property and other assets you want to protect. You can choose a limit and deductible that works for you, and your premium will reflect that. Many experts recommend carrying enough homeowners insurance to rebuild your home, replace your belongings and safeguard your assets.

Home insurance policies cover a wide range of sudden, damaging events. But each policy is different, and yours will say what’s covered and what’s not. In insurance lingo, these are called covered perils. Homeowners insurance coverage may vary by state, insurer and policy, but typical home insurance policies cover damage caused by:

  • Windstorms
  • Hail
  • Lightning 
  • Fire
  • Vandalism and theft
  • Explosions
  • Falling objects
  • Vehicles
  • The weight of snow or ice
Flooding and earthquakes are among the hazards that are not covered by a standard homeowners policy. Separate flood insurance is available through the National Flood Insurance Program. Farmers offers earthquake insurance for homeowners and renters. A Farmers agent can walk you through the options.

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