Understanding about homeowners is very important for any person who wants to purchase a home through mortgage finance. As motor vehicles have insurance coverage, it is of great importance for a homeowner to have home insurance for their homes. When you fail to have a homeowners insurance, there are various occurrences that pose a risk to your home. When a risk of fire occurs and destroys a part of your home, you will be forced to finance the refurbishing cost if you don’t have a homeowners insurance. When you are purchasing a home, and you don’t cover the house with any insurance company, your lender, let’s say a bank will pass this cost to you as a final consumer and you will find yourself paying more for the home. The lender will purchase a policy from homeowners insurance on your behalf and these costs associated with the mortgage will be distributed in your mortgage as you repay the lender.
They ensure that they have covered their mortgage from any risk and therefore as the final consumer you will find yourself paying a triple amount of the premiums payable to the insurance company. It is, therefore, necessary to have a homeowners insurance to avoid these two risks. By having the policy, you will overcome the risk of loss if the covered risk occurs and destroys your home as the insurance company will compensate you for the loos. Also, you will evade the triple charge on insurance premiums if the premium is paid by your lender. Therefore as an insurance expert, I would like to advise every homeowner to mitigate these two risks that are real and likely to occur.