Is Home Insurance Worthwhile?
There always seems to be another expense to content with. Mortgage payments, rising utility costs, vehicle repairs and credit cards loom every month and seem to cost more rather than less as the years go by. As you evaluate your monthly expenses, you may ask yourself – is home insurance worthwhile?
Your Largest Asset
If your home was damaged or lost because of a fire, flood, storm, vandalism, explosion or other unforeseen disaster, could you afford to rebuild it without home insurance? Your home is likely to be your largest asset and it would cost quite a bit to rebuild if it were lost. Unless you are sitting on hundreds of thousands of dollars, you would be unable to reconstruct your place of residence if it was wiped out in a crisis. Further, all of your appliances, electronics, clothing, food and furniture would also need to be replaced which can represent a major expense you would be unable to afford without the help of home insurance. Having building and contents insurance gives you the peace of mind to take care of business if a destructive event occurs. Additionally, you mortgage lender may require you to have building insurance to protect their investment if a disaster occurs.
Know What You Need
By simply knowing the coverage you need, you can make sure you aren't paying for additional coverage you don't want. Building insurance may be calculated based on the number of bedrooms in your house or the sum insured of the building, which means the cost to rebuild your house if it were destroyed. Sum insured policies may be more cost effective because the premium are based on the exact cost to rebuild your home and you can hire a surveyor to ensure this amount is accurate. By doing an inventory of all your possessions, you can get a content insurance policy that covers exactly what you need to minimise premiums.
Clearly home insurance is a worthwhile expense to protect your most valuable
asset as well as your financial security.