Insurance schemes are often considered an additional unnecessary expense when bought for other than life or health coverage. However, you already know that life events are unpredictable and you certainly cannot protect everything you own at all times.
Just like most insurance schemes, a home insurance will provide your coverage for unexpected incidents like natural disasters or man-made events like theft or fire or riots. Presently, banks provide insurance facilities along with the home loan to protect your valuable asset. It not only protects the structure of the house but the belongings associated with it.
Lately, there has been a considerable rise in the number of home loan takers, however, people opting for insurance is very less. It does not seem practical to take a loan with over two decades worth of repayment and not protect its existence.
Covers repair and rebuilding expenses
When an unfortunate event occurs and the house is damaged, you will need the funds to get your house rebuild or repaired for yourself and your family's life to function normally. With a home insurance, these are covered to the extent of the agreement of the policy, preventing you from having to break your emergency funds to restore it.
Life goals and emergencies
As an intelligent investor, at various life stages, you will have various goals to achieve and saved accordingly for them. You will have a home loan, locked fixed income investments, child education expenses, probably even car EMI that you still to repay, and more. Most of these expenses you cannot cut down on and if you are faced with an unexpected calamity, you may have to give up on your some of your assets you took years to acquire, due to the additional burden.
Without a home insurance, you may also have to break your emergency fund created over the years and this will disrupt the flow of your path towards achieving your set life goals.
House is a primary asset
It is said that clothing, food and a roof over your head are the basic necessities of life. We all work towards fulfilling these needs for ourselves and our loved ones. A house is also a piece of the earth that we as human beings transform into our habitats.
Therefore, leaving yourself and your family exposed to vulnerability is not essentially practical. If the damage is caused to the house, you may have to move, which will affect your child's education and your own commute to the workplace. You will have to end up making big compromises just to get by.
Points to note
The premium and cost of a home insurance will depend on the kind of insurance you opt for and what kind of incidents it covers. You should note that some insurance plans may not cover a natural disaster.
Additionally, it also depends on the contents that you choose to insure and the location of your house. If you live in an area prone to a particular kind of event, like earthquakes or lightning, the premium to be paid will be higher.