When you borrow money to buy a home, the lender requires that you purchase insurance to protect their interests. Unfortunately, many people who must buy homeowners insurance never really understand all of its features or how they could save money on premiums.
In this post I’ll cover 10 facts you should know about home insurance so you get the most out of it and pay less.
In addition to meeting your mortgage requirements, having a comprehensive homeowners policy is a smart way to protect your financial future. You probably know that it pays to repair or rebuild your home after a disaster.
In addition, there are lesser-known coverages it includes, such as additional living expenses or ALE, which pays a certain amount of lodging and meals when you’re forced to move out of your home while repairs are made after a covered disaster.
Plus, you should have liability coverage to stay safe from a lawsuit if someone gets hurt on your property or you injure someone or their property in or outside of your home.
However, unlike with auto insurance, there’s no law that says you have to purchase any amount of home insurance. So once your mortgage is paid off you can drop coverage if you like, but I generally don’t recommend it.
Here are 10 facts you should know about homeowners insurance to protect your personal finances: