IS GETTING A HOMEOWNER INSURANCE STILL WORTH IT?
IS GETTING A HOMEOWNER INSURANCE STILL WORTH IT?
Recent studies have shown that home prices in the United States have increased for the past few years. Along with the continuous price increase of houses, homebuyers are experiencing a hard time deciding whether to buy homeowner insurance or not.
In addition to this, homeowner insurance premiums are also increasing due to the inflation of housing materials. With those situations given, high mortgage payments and high insurance premiums might drain the paycheck of an average income earner. However, there are a lot of factors that prove that the higher your house cost, the more you should get homeowner insurance.
Well, you might be thinking that the average cost of $1,100-$1,500 annually for a home insurance premium is already too much for your pocket. Even so, not getting one might be more expensive for you.
Certainly, you will be saving a lot of money if you do not get home insurance, but once you need to rebuild your home, you will use more than what you have in your savings. Also, unexpected liability claims against you are out of your budget, so think twice before deciding not to get homeowner insurance.
Location prone to natural disasters
Your home or future home location will be a major factor when deciding to apply for home insurance. Over the years, the United States has been vastly affected by several natural disasters such as fire, earthquakes, volcano eruption, floods, landslides, hurricanes, and tsunamis.
With thorough research, we have gathered the areas prone to natural disasters. Thus, if you plan to move to these areas or are already living here, you should consider getting homeowner insurance. Below you can find a few of the areas prone to a natural disaster:
● California
As many of you already know, California is massively prone to natural disasters compared to other countries. Disaster in California almost includes all of the mentioned natural disasters.
From the 1950s to today, more than 300 natural disasters have been declared in California, and the majority of these are wildfires and floods. Thus, ensure that your homeowner insurance will include the majority of the natural disaster protection.
● Texas
In Texas, flooding is the type of natural disaster that occurs the most. Flooding is not only destructive for your home but also risky for your life. Moreover, if you plan to live or already living in Texas, ensure that the policy of insurance you will be getting includes flood protection as not all homeowner insurance covers that type of natural disaster.
● Oklahoma
Oklahoma makes it on the list as well, and it also experienced all of the natural disasters mentioned. Furthermore, the most common type of natural disaster that occurs in Oklahoma is no other than tornadoes. Some might think that the possibility of a tornado happening is very rare, but for Oklahoma, it is not as impossible as you think.
● Washington
Just like Texas, flooding is the most common type of natural disaster that occurs here. Therefore, for you to be covered by your insurance, make sure that they include flooding in their policy. In addition to this, homeowner insurance is not enough to protect you, make sure that you do the necessary preparations in the event of a flood.
● Florida
The majority will agree that Florida is a great place to live as residents don't have to pay a state income tax. In addition, many good beaches are not that far from the area. However, insurance costs in Florida are relatively higher than the others as it is vulnerable to all the natural disasters mentioned.
Those are just a few of the many areas prone to natural disasters. Other areas that make it to the list of top prone areas to natural disaster are New York, Nevada, Colorado, New Mexico, Alabama, Oregon, and Arizona.
Many credible studies show that the majority of the areas in the United States experience natural disasters more than average compared to other countries. Consequently, getting homeowner insurance is not even an option, especially if you live around these areas.
"Rebuilding your home" or "Homeowner insurance claims"
As time goes by, your home value is more likely to appreciate for the reason that more homebuyers are looking for a house, and the supply is scarce. Along with your property value appreciation, inflation rises as well. Thus, if your home is damaged and you have to repair it, the cost of your house from the day you acquired it won't be the cost of overall repair once the property becomes damaged in a few years. In addition to that, saving up to $250,000 which is the usual dwelling coverage of insurance policies is not that easy.
Along with the rising value of house prices in the United States, with the median value of $329,000, many should realize that homeowner insurance is a must if you do not want to lose your home at any time. According to the National Association of Homebuilders, rebuilding new homes could cost you around $200,000-$300,000, and it will also depend on your location meaning it could go higher or lower than that. Also, even if you can earn that amount of money, it is not practical to spend all your hard-earned money just to repair or rebuild your damaged home.
On the other hand, you could choose homeowner insurance rather than paying to rebuild your home from your pocket. Furthermore, homeowner insurance may provide your need, but along with inflation of house materials, the annual premiums rise as well. Lastly, keep in mind that homeowner insurance does not just cover your home, but also it covers liability claims against you that you might need any time.
Is it worth it?
As a result of not getting insurance, you are more likely to suffer from financial problems since it would take years for you to recover from paying all the liabilities and repair costs of your home.
This could affect your plans for your family, as an unexpected event without financial assistance from your insurance company will make your life miserable.
Therefore, a homeowner who is prone to a greater risk of losing their home should know best that homeowner insurance will secure their future. To conclude, with all of the given circumstances, especially the ones that are not expected, getting homeowner insurance is still worth it.