4 Key Reasons Skipping Home Insurance Is a Bad Idea
Your house is one of the most significant assets you’ll ever own, yet many homeowners are choosing to skip insurance due to rising costs and are taking the risk of no coverage or protection. A full 30% of American homeowners are anxious about the jaw-dropping costs, according to Insurify, and with good reason.
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Insurify’s recent data stated: “The average annual rate increased by 19.8% between 2021 and 2023, from $1,984 to $2,377.”
And it’s not getting better. “Insurify projects a 6% increase in 2024, placing rates at $2,522 by the end of the year. Early weather forecasts predict a devastating hurricane season, which would cause further rate increases in 2025.”
While ditching the pricey annual bill is tempting, there are several reasons not to. Here’s why.
Your Home Could Go Into Foreclosure
Although buying homeowners insurance is not legally required, lenders require it if you have a mortgage on your house. If you’re caught without, there can be serious consequences.
“If your mortgage lender requires it and discovers your home isn’t insured, it could initiate foreclosure, resulting in the loss of your home,” Experian indicated. “Or the lender might simply force you to get homeowners insurance by getting new coverage for you and adding it to your monthly mortgage payments.”
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No Protection From Guest or Acquaintance Injury Claims
Accidents happen, and if a guest or acquaintance gets injured on your property, you could be personally held liable — where usually homeowners insurance would cover those costs.
According to Progressive, “If a friend or neighbor is injured on your property due to your negligence, you may be liable for medical bills and other expenses. A loose handrail, an unsecured pool, or snow and ice on walkways may all cause accidents. Personal liability coverage may pay for injuries sustained by others on your property, up to your policy’s limits.”
No Financial Help if Your Home Is Burglarized
Another benefit of homeowners insurance is that your belongings are protected if your house is robbed.
“Homeowners insurance may help cover theft and break-ins,” per Allstate. “Several coverages in a homeowners policy help you recover from a burglary: dwelling coverage, personal property coverage and other structures coverage.”
If you have high-end items like expensive artwork and jewelry, consider looking into additional coverage to ensure you’re fully protected.
No Dwelling Coverage
Many policies protect your home from certain events you’d otherwise be financially responsible for.
“Dwelling insurance is the keystone of your homeowners insurance policy,” U.S. News & World Report outlined. “It pays to repair, replace, or rebuild your home’s structure after a covered peril. This could include fire, theft, vandalism, or a weather event such as lightning, wind, or hail. It could also cover damage from external forces like a falling tree branch.”
Every homeowners insurance policy varies, so read the fine print and know the scope of the limitations of your coverage for maximum protection.
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This article originally appeared on GOBankingRates.com: 4 Key Reasons Skipping Home Insurance Is a Bad Idea
