The Importance Of Having Homeowners Hazard Insurance For Homeowners

This Article Is About The Importance Of Having Homeowners Hazard Insurance For Homeowners

A home is most people’s single largest investment in their lifetime. Homeowners Hazard Insurance is mandatory by lenders on homes with a mortgage. Buying a home is an exciting process. Protecting your single biggest investment should be exciting as well. Unless you pay 100% cash for your home, you will be required to have property insurance. The concept is similar to auto insurance, which is required to drive on public roads. If you are going to finance a property, your lender will require you to have proper homeowners insurance coverage. In this blog, we will detail why a mortgage lender requires homeowners insurance. We will also see the few dangers insurance companies see most.

According to a major insurance provider, the five main dangers homeowners face are listed in the following paragraphs below.

Prequalify for a mortgage in just five minutes. 

Water Damage Covered By Homeowners Hazard Insurance

Water Damage Covered By Homeowners Hazard Insurance

Number 1: Water Damage.

It is a misconception to think water damage is only from heavy rain and hurricanes. According to insurance providers, most water damage claims from 2009 to 2016 were not weather-related claims. Non-weather-related insurance claims are usually linked to plumbing-related issues. Leaky pipes drain, and valves, as well as appliances, can lead to major water damage. It is very important to make sure you regularly inspect your plumbing inside and outside of your home to minimize the risk of water damage.

Weather-Related Homeowners Hazard Insurance Claims

Number 2: Weather-Related Claims.

Weather-related claims can involve roof damage and other issues from hail or flash flooding. Since severe weather is something to plan for, it is important to speak with a licensed insurance agent for specifics. If you live in an area with heavy rains, you may want to increase your homeowner’s insurance policy to be protected. Utilizing the minimum required insurance can come back to haunt you. It is no secret that a heavy snowstorm can cause trees to fall which can create damage to your roof, home, or even your fence. It is a good idea to regularly inspect trees in your yard and carefully remove weak limbs that may easily fall.

Frozen Pipes Can Cause Tens Of Thousands Of Dollars In Damage

Frozen Pipes Can Cause Tens Of Thousands Of Dollars In Damage

Number 3 – Frozen Pipes.

Another extremely costly insurance claim may be caused by a frozen pipe. Frozen pipes in the winter months can create a horrible situation for a home and the property inside the home. It is important to identify at-risk pipes and insulate them properly to save you from catastrophe. Many insurance companies now recommend using a smart thermostat to manage your home more closely. With a smart thermostat, you can monitor the temperature in your home more closely and set up automated alerts if the temperature drops in your home. You can even adjust the temperature remotely. This will help prevent any pipes from freezing.

Theft And Criminal Damage To Property

Number 4 – Theft.

Many people think they live in a safe neighborhood, but theft is still occurring across the nation. There are steps you can take to prevent theft. You want to make your home less attractive to thieves. It is possible to use landscaping to deter thieves. The fewer people can see into your property, the better. You can also place trees in areas to hinder escape routes. Outdoor lighting is incredibly important as well as surveillance alarm systems. These are just a few methods to prevent thieves from picking your home to rob. Surveillance systems are becoming increasingly cheaper. An at-home security system may save you money on your homeowner’s insurance policy! 

Fire Is Major Cause Of Destruction And Homeowners Hazard Insurance Coverage

Fire Is Major Cause Of Destruction And Homeowners Hazard Insurance Coverage

Number 5- Fire.

Although fires are less common in modern times, a house fire can be devastating. Not only will you lose your home, but you will also lose the sentimental possessions inside of your home. Fire claims are some of the costliest to insurance companies because the damage is so vast. Fires can start from overloading electronic circuits, cooking accidents, fireplace incidents, and even extreme weather. It is important to regularly test and inspect all fire alarms in your home. Having a fireproof safe it’s not a bad idea for valuable possessions. If you know someone who has gone through a home fire, you know what a costly headache it can be.

Get expert mortgage advice now. 

The Importance Of Homeowners Hazard Insurance To Protect Your Home From Major Loss

Above are just a few reasons why lenders require insurance on a property. Your lender will periodically follow up to make sure your house is properly insured. If at any time, your mortgage lender verifies you do not have the proper coverage, your lender will then add “forced placed insurance” to your monthly bill. Forced placed insurance is also referred to as creditor-placed insurance. This coverage is typically more expensive and provides less coverage than choosing your own policy. So, there is no way to cheat the system. Make sure to keep your home properly insured.

Gustan Cho Associates have close relationships with a few different insurance outlets, but a lender cannot tell you who to use to insure your property. We always recommend reaching out to more than one insurance company to make sure you are getting the best deal. Typically, it makes sense to combine your home and auto insurance. For more questions related to homeownership and homeowner insurance requirements, please call Mike Gracz on 630-659-7644 or shoot an email to [email protected].

Leave a comment