Why Do You Need Home Insurance?

Your home is your refuge. It's where you sleep, dine, enjoy your leisure time, and spend time with your family. Whether you're a renter or a homeowner, you likely have tens of thousands of dollars of value in your home, including your belongings and the structure itself. Home insurance can protect that value from unexpected damage. Here are four reasons you should purchase home insurance:

1. You need to secure a mortgage.

Most people can't afford to purchase a house or apartment outright. Fortunately, banks and other lenders offer mortgages to help prospective homeowners finance their homes in exchange for a downpayment. Lenders want to ensure that borrowers will repay the full cost of their mortgages. To that end, many lenders require homeowners to purchase homeowners insurance as a condition of the mortgage. Homeowners insurance will protect the value of your house and property from unforeseen damage.

2. You live in an area prone to natural disasters.

Natural disasters are unpredictable, like all forces of nature. However, some geographical locations are more prone to weather occurrences than others. If you live in an arid climate that sees a lot of wildfires or a tropical climate that experiences many hurricanes, it's especially important that you invest in home insurance. While you can't prevent flooding or fire from damaging your home, you can take steps to minimize the financial losses you may suffer from these events. Some natural disasters, such as earthquakes, are not covered by basic home insurance policies; do your research and purchase additional coverage, if necessary.

3. Your landlord requires it.

If you're renting, you may think you don't need home insurance. However, renters insurance fulfills the same function as homeowners insurance. It will protect your assets in the unfortunate event of theft or property damage. Some landlords require their tenants to purchase renters insurance as a precautionary measure. If your landlord stipulates that you must purchase an insurance policy as part of your lease, you are legally required to comply.

4. You don't have anywhere else to stay.

If an unforeseen event badly damages your home, you'll need to stay somewhere else while repairs are being conducted. Some people have the luxury of staying with family members free of charge. If this isn't an option for you, you should purchase home insurance. Home insurance will reimburse you for the cost of temporary lodging if you're unable to reside in your home as a result of covered damages.