Trying to find the best insurance policy for your needs is no easy task. The key is to evaluate what you’re willing to pay for and what exactly you’re hoping your insurance will be able to do. So, how can insurance potentially save you money? Insurance is primarily an investment in your future. The premiums you spend today on car, home, and life insurance policies will be able to help you avoid financial situations that could lead to bankruptcy or ruin years down the road.
So, while saving money with insurance might not be the primary purpose of purchasing a policy, it’s still possible.
The benefits of Homeowners’ insurance
To see the potential savings, you can make by insuring your home, it’s important to first understand how insurance works. At the most basic level, you’re paying for the right to be compensated if something goes wrong at some point in the future. For example, the average cost to furnish a house is between $29,550 and a whopping $60,000. A small kitchen fire that is quickly controlled can cause $1,000s of dollars of damage to furnishings and kitchen units.
Fire damage restoration costs
The above example doesn’t take into account the full financial implications of a more serious fire. When you add into the mix the costs of repairing damage to the property itself, the financial burden of being uninsured quickly rises. Fire damage restoration costs for a small fire range between $2,914 and $32,522. However, these costs can rise dramatically.
Compare those costs with the cost of an insurance policy
The example of a small fire could set you back at least $2,914. Now consider the average cost of homeowners insurance in the US is $1,312 per year for $250,000 in coverage. At this very conservative example, the savings made by the homeowner would be $1,602. In the event of a much larger fire, your savings could be much higher! Companies such as KBD Insurance provide online and telephone quotes on a range of insurance packages.
The example outlined also ignores many other benefits of homeowners’ insurance. For example, not only will you be covered against fire damage, with the right policy, you will also be covered for:
- Damage to the building itself and any detached structures, including detached garages, sheds, workshops, pool houses, and so on.
- Contents and personal belongings are protected against damage or theft
- Additional living expenses (hotel, travel, and food costs if you and your family can’t stay in your home due to a claim)
- Civil liability (damage you or your property may cause to others)
Tenants should consider renters’ insurance
While renters’ insurance in the US is not required in most states, it is something that you should seriously consider taking out if your policy allows it. The general premise of a renters insurance policy is the same as a homeowners’ policy. You will be compensated for damage or theft to your property, and you’ll have coverage against the financial burden of being without a home while repairs are carried out.
In some cases, your landlord will provide buildings cover when he applies for a mortgage to purchase his property. In these situations, it’s important to understand exactly what is covered under this policy.
Whether you are a homeowner or tenant, it’s not difficult to see the potential savings that are available if you have the right insurance policy in place.
