If you have home insurance, it’s likely that when the new policy is renewed, you may be curious as to what the worst outcome would be if you simply canceled the policy altogether.
This is a good idea if you have millions in the bank to spare, or if you are happy with the concept of losing all your belongings. However, canceling home insurance or not taking it out at all is a gamble that you shouldn’t take, and, in this article, you will find out more about why.
Self-Insured
As mentioned before, if you have millions in the bank, you can afford to self-insure. However, if you have not paid off your home, then any damages that happen via disaster or as the result of an accident, you will be required to pay for.
Also, consider that in most cases, homeowners or even people who are renting, will have lots of items on their property that carry sentimental value. Should your home burn down, you will not have any monetary payment to potentially replace them, which can be a devastating blow. So, always be sure to take out home insurance ottawa.
Liability
Suppose you have somebody visiting your home and then they become injured. While you will usually be able to talk family and friends out of seeking compensation, liability cover will help to provide the cost of medical expenses or repair to any of their belongings. Plus, on top of this, home insurance will also help to repair the part of the home that caused the injury. Legally, if you do not have home insurance, you are liable for not only paying medical fees, but also repairing the property.
Unsecured Financing
Suppose you have purchased your home. You will be required by your mortgage provider or other lenders to take out homeowners’ insurance. This is to help them protect their investment in case it becomes damaged from a natural disaster, vandalism, or an electrical fire.
So, if you start by paying your home insurance premium every month and then cancel it, it’s highly likely you will receive a letter from your mortgage broker who may even be legally able to terminate your mortgage.
Contents
As briefly touched on earlier in this article, home insurance doesn’t only cover the walls, the roof, and the structure of the home. In most cases, it also covers the items within the home, such as furniture, clothing, and heirlooms.
So, if you were a collector of Ming vases, for example, and your home went up in flames, home insurance will (albeit a very specialist for items of that value) likely cover the cost. That way, you could restart your collection without paying a small fortune out of pocket.
No Peace of Mind
There is a lot to be said about peace of mind, especially in 2022 following COVID and when more and more areas around the world are becoming susceptible to wildfires. Having home insurance will allow you to have peace of mind, which you cannot put a price on.
