Earlier this year, the state of Texas got hit with a horrendous winter weather event. The storm shuttered the state for several days and crippled it for weeks after the fact. The total insurance losses estimated from this event are projected to exceed twenty billion dollars. And this only accounts for the expenses of those who were fortunate enough to have a homeowner’s insurance policy.
Anyone living without home insurance risks having to pay serious cash out of pocket if anything goes wrong. Here’s what you may have to deal with if you decide that investing in home insurance isn’t worth the cost.
Your Home Gets Totally Destroyed and You Can’t Fix It
One of the insurance risks that you nonetheless should account for is the potential for your home to get totally destroyed. No matter the cause, if you don’t have home insurance, you’re on the hook for every expense related to repairing and rebuilding your home. If you have a home insurance policy, you’ll only be out of pocket the deductible on your policy.
Someone Gets Hurt On Your Property and Files Suit
Let’s say that someone trips over a hose and breaks their leg while at your barbeque. If you don’t have homeowners insurance and they file suit, you’ll have to pay all of their medical bills, as well as potential legal fees, and pain and suffering. Buying insurance now can save you hundreds of thousands of dollars later.
Your Lender Forces Your Mortgage to Default
Did you know that most mortgage lenders require you to have homeowners insurance before you close on the home? Some less than scrupulous homebuyers cancel the policy right after they close, hoping to keep the home and avoid the premiums.
Don’t try this. If you do, your mortgage lender can send your account into default for violating your contract with them. There are better ways to save that don’t risk your credit score. Have a look at this guide to get some ideas on how you can ensure that you have the right insurance policy at the right price.
Did Your House Get Broken Into? Too Bad!
Another of the most common insurance risks that homeowners policies cover is property theft. Now, imagine that your home gets broken into right after you finish paying off your brand new TV and computer. Those high-dollar items have now vanished, and you’re on the hook for buying replacements.
Having No Home Insurance Risks Financial Ruin
As you can see, there are a number of insurance risks that having a homeowner’s policy can help you absorb. If you don’t have one, you’ll have to pay for everything out of pocket, which risks your financial ruin. Suddenly, those premiums you derided as “too expensive” seem like a drop in the bucket compared to what you’ll face without them.
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