Many people think that home insurance is a waste of money. What these people fail to see and realize is that it is more expensive if you don’t purchase home insurance. It is understandable why people think this way, especially if you are living on a tight budget. You don’t have enough to pay for the insurance, and you think you are not getting anything of value in return.
Because of such thinking, people tend to forgo their coverage, thinking that they can do so because they are not actually consuming their coverage, especially if they have not claimed anything for the past several years. However, before you go “bare,” there is something important that you need to know. There are some repercussions that you might not be aware of. So we’re telling you this now. The truth is, you are not saving a penny when you go “bare,” or when you decide to skip buying a policy for a year or so. The thing is, you can end up paying more when you don’t have any home insurance at all. There are various reasons why is this so. The following are just some of these:
Catastrophic Loss
Ask yourself how much money and value you could lose when your house is destroyed by a catastrophic event such as fire? You don’t just take into account the value of your home. Think of all your clothes, your expensive furniture, your appliances, your jewelry and all your valuable belongings. How expensive it is replace all of these when you suffer from a catastrophic loss. Are you financially prepared to cover all these even without the insurance? Can you replace all these on your own by pulling money off your pocket or savings? When you’re covered, you won’t have to worry about any of this. Your money will be well-spent. It’s all worth it. Trust us.
Even people who can afford to cover the losses on their own still get insurance for catastrophic loss. This is the smart and practical way to do it. You can save a lot of money if you are insured. A catastrophic event such as when your house and all your belongings therein are destroyed can really hurt you badly financially. It can be very difficult for you, especially if you are an average earner, to get back up and regain from the loss. What people don’t realize is that home insurance coverage is not that expensive. This is due to the low frequency and low probability of catastrophic loss. You can even save more if you raise your deductible. You can even pay for any minor losses on this. A catastrophic loss may be rare or might not happen at all. But it’s always best to be financially ready and prepared for something like that to happen.
Future Insurability
Buying insurance on and off or skipping on it continuously for several years can be bad for you. This can raise suspicions from insurance company. This is the reason why most insurance companies ask their clients how long they have continuously maintained insurance upon applying. The companies will think that you are just using them or you are merely intending to apply to file a claim in the near future. They can become skeptics toward you. So if you think that you are saving money when you have not paid your insurance over a period of time, think again. For all you know, you can lose more money in the process.
Liability Claims
It is not just your home that you need to worry about. While you can take your chances on whether or not you will suffer from a catastrophic loss or any minor loss for that matter, you cannot just roll the dice on liability claims. How sure are you that you won’t get sued or get involved in a claim? If you are not properly protected and insured, you can end up losing all your assets when you are sued by a third party and the judgment is against you. Lawsuits can really be expensive. It can drain your pockets and assets. Liability insurance is your best legal and financial defense. When you are insured, you can save a lot on attorney’s fees and other expenses in the process, from litigation to final judgment. Liability coverage is part of your home insurance. So better invest on it. You’ll save more in the long-run or when the time comes. It’s worth it!
Going without home insurance is a huge risk. Don’t take this lightly. If you want to go “bare,” think about how can this affect you financially, in the long-run. The basic question to consider is that: is the insurance cost more expensive than covering all the expenses yourself when problems arise? We think you’re wise and practical enough to know the answer.
