When you purchase a home, you need to buy a homeowner’s insurance policy, also called a home policy. Your financial lender typically requires this insurance while you re-pay your mortgage. This policy protects the bank from losing its investment. If a named peril destroys the house, the bank does not lose money. The term named-peril refers to an unexpected hazard such as a tornado or fire.
Once you repay the mortgage, the bank has no say in it, and you could theoretically drop your coverage, but Anderson Atwood Consulting wants you to understand why you need to keep that coverage. Your Denver, CO home continues to need protection from named perils such as snowstorms, ice storms, fire, etc. If a peril damages your home or property, the home insurance reimburses you for its repair or replacement.
Every homeowner needs liability coverage, too. Once your mortgage gets paid off, you probably want to enjoy your home, knowing you owe no money on it. If an accident occurs at your home, though, you incur the liability and must pay the injured party’s medical bills. They may also sue you for damages. Your homeowner’s insurance policy covers the settlement and medical bills.
Some home policies also cover the other structures on your property. This means the detached garage, workshop, fences, detached home office, etc., receive the same coverage from named perils, liability, etc., as the home itself. They do not receive the same coverage cap, though, since other structures typically provide about ten percent of the home’s value as a reimbursement cap.
Contact Anderson Atwood Consulting serving Denver, CO for more information on home insurance and how coverage can protect your home and your investment in it.