Do I Need Home Insurance?

In California, homeowners insurance has an average annual cost of $996, that is $83 a month. That is relatively cheap in comparison to costs in other states which can reach up to $2000 a year(Florida, in case you were wondering).

Is home insurance required by law? No, unlike car insurance which is required by law, home insurance is usually required by a lender.

Do you really need home insurance? Yes, home insurance will cover any damage from a fire, theft, or earthquake(check your policy if it covers earthquakes, if not make sure to get it covered). It will cover any accidents/injuries that could possibly occur at your home and will replace any items that were stolen in a theft.

There are of course cons to home insurance, it doesn’t cover damage from a flood(unless you purchase a separate flood insurance policy) and covering jewelery in the event of theft results in a more expensive premium. It also won’t cover mold damage, which is a huge health risk, it won’t cover a sewer backup(you can get it covered for an additional $40 to $50 a year), it won’t cover sinkholes, and it won’t cover termite infestation(it is recommended to have a termite inspection performed on your home once a year).

Is home insurance worth it? There is an average of 360,000 fires a year in the U.S. The average cost of damage a fire can cause is around $45,000. For example if you have a $1000 deductible on fire damage, you will be saving yourself the burden of $44,000 in repairs and restoration. So I would say yes, home insurance is very worth it.

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