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[SIZE=3]I am new in US and in this concept and wanted to get some input.My understanding is that we do not have to have home insurance. What I heard most home insurances mainly coverfire and when your home burns down it is not really that easy to get money fromthe insurer. Any input please?[/SIZE]
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You will not be able to get a mortgage to buy your house without insurance.
it might take some time to get the insurance company to pay you in case of disasters in the area which mean the insurance companies are overworked and can't get somebody out to look at your property. But in case of fire or vandalism it shouldn't take too long.
Also home owners insurance covers liability issues. Say your dog bit a child, your sidewalk was slippery and invited guest broke their leg coming to your door., neighbor kid drowns in your pool. All these things would mean you would probably lose every single cent you have from being sued by the harmed party. It is very foolish to not have insurance.
in the case of fire please know that a complete investigation has to take place for the insurance company to be able to pay you. Fires for insurance fraud are pretty common so they are thoroughly investigated.
You"ll need it unless you have enough cash to buy the house outright. If it was optional I would skip it, same with car insurance. I never understood why anyone thinks it is necessary or a good idea. Insurance is one of if not the most profitable businesses in the world for a good reason
Even if your house is paid off having insurance is good. It's called transfer of risk. You pay a small amount of money to get a large amount of coverage in case of a issue. Unless you happen to just have millions in the bank and even then why put your money at risk. Someone sues you for 200,000 and wins that's a 100 years of coverage at 2,000 per year.
Here's the thing: America is a VERY litigious society. The concept of "injury" has been overblown to the point that people can take you to court and sue you for just about any reason, even if they were at fault. As indicated above, slipping on an icy sidewalk, injury, drowning in your pool, even slipping in your bathtub. There's even been instances where burglars have broken into a house, been injured, and have sued the homeowner for putting them at risk! They may not win, but dragging you into court means attorneys, court costs . . . it's not cheap. If you have liability insurance as part of your insurance, you are protected from silly stuff like this. (And the more money you have, the more they sue you for . . . )
Plus, there are tornadoes, hail storms, fires from thoughtless smokers, lightening or bad electrical wiring, floods, cars that accidently take out your front porch -- anything can happen to a house. Insurance can also cover theft, with certain conditions, so if someone breaks into your home and takes lots of valuable thing -- electronics, cameras, computers, jewelry, etc., the insurance will often provide the replacement cost (within their limits). If you have sufficient assets to be able to replace the damage to a home, then maybe you don't need it.
However, EVERY mortgage company will require insurance. If you don't buy it yourself, they will provide it for you -- at a cost that is almost always higher than if you got it yourself. And yes, they keep track -- the insurance company notifies the mortgage holder, as a co-owner, if insurance lapses. If you have a 90% loan, for example, the bank really owns 90% of your house -- so if something happens to the house, they want to make sure that their investment is recoverable.
If you are renting a home, then your landlord probably has insurance on the house, but his insurance will NOT cover your personal belongings. So, if a tree fell on the house, his insurance will take care of the repairs to the house, but if the tree has also broken all your living room furniture, then you lose your furniture and have to replace it out of your own pocket.
Even if your house is paid off having insurance is good. It's called transfer of risk. You pay a small amount of money to get a large amount of coverage in case of a issue. Unless you happen to just have millions in the bank and even then why put your money at risk. Someone sues you for 200,000 and wins that's a 100 years of coverage at 2,000 per year.
The chances of being sued for 200,00 are negligible. Insurance is not a non profit business looking to help the people, they make a killing taking money that they do not pay back. There is a reason insurance companies are always among the most profitable businesses in the world
The chances of being sued for 200,00 are negligible. Insurance is not a non profit business looking to help the people, they make a killing taking money that they do not pay back. There is a reason insurance companies are always among the most profitable businesses in the world
Ok then don't get insurance. I'm not saying I like paying for it but I'm not going to put my properties at risk. Feel free to do as you please with your properties.
I never said ins co is non profit.
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[SIZE=3]I am new in US and in this concept and wanted to get some input.My understanding is that we do not have to have home insurance. What I heard most home insurances mainly coverfire and when your home burns down it is not really that easy to get money fromthe insurer. Any input please?[/SIZE]
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For you primary residence or a rental property?
Either way, trust me, it's better to have it than not, and as was already mentioned - if you have a mortgage it is a requirement.
You can shop around for the best deal, but you get what you pay for.
3 weeks ago today we woke up to Old Faithful in a second floor bathroom. I had put my little one back to bed after he had a nightmare around 3am. At 6am he was in our bedroom again, but this time he was telling us "there's something on in the bathroom".
Water was everywhere. Long story short, the damage extended down through our first floor and in to our finished basement. Since this particular bathroom sits where it does, the garage was flooded as well. The basement furnace, that heats the first floor, wasn't working because water had run down walls, got in to the returns and ended up in the furnace.
Called the insurance company after wet vac'ing the bathroom (which we just renovated) carpet, hard woods on the first floor (dining room, back hallway, pantry, closet, furnace, etc.).
They had an "environmental crew" out around 4pm. They started ripping out ceilings & walls and tore carpet back to remove the padding. They did quite a few other things as well. Left us with huge fans and dehumidifiers on all 3 floors and in the garage (which was an ice skating rink). Insurance adjuster showed up 3 days later and he was a jerk. Still is. We "dried out" and now our garage doors won't shut, our hard woods have buckled, etc.
Yes, we're going to have a fight with the insurance company.
You'd be out of luck if you don't purchase a homeowner policy. If we didn't have insurance, we'd have ZERO dollars to fix the damage, instead of what some garden gnome with a bad attitude thinks we should receive to indemnify us.
The chances of being sued for 200,00 are negligible. Insurance is not a non profit business looking to help the people, they make a killing taking money that they do not pay back. There is a reason insurance companies are always among the most profitable businesses in the world
Actually you have it wrong, insurance companies are not highly profitable because of the risk business. Insurance companies are profitable because they take the money you pay in premiums and invest it in real estate (most large commercial building are owned by insurance companies), they collect large lump sums of money and pay out annuitants a little at a time and make other big time investments (much like banks do) that pay them more than they will ever earn from insuring customers.
Not defending insurance companies, just saying the model is greater than just premiums and settlements.
Personally, I would rather pay $1000 a year for 20 years ($20K) than risk losing my $500K house to fire, flood, tornado or having my personal assets at risk by some idiot that falls down in my back yard or gets bit by my dog. If you have something to lose then you need insurance, it is that simple.
When I was a young man I got into a minor car accident and was sued for a lot of money (nuisance claim). I hired a lawyer who asked me several questions:
"Do you have any saving? - No
Do you own any property? - No
Do you make a lot of money? - No
Then you have nothing to worry about. If you have nothing they can't get anything."
So if you have nothing, then skip the insurance, But if you have something that you want to keep then you need insurance.
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