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A home is the largest purchase many people make. Since home ownership can be so expensive, it’s important to protect this investment and avoid future financial hardships. In particular, you must properly insure the house not only with building insurance but also with contents coverage. Here are details of why contents insurance is often overlooked and why you should make this coverage a priority.
Why Contents Insurance is Overlooked
Typically, when you finance a house, the mortgage lender will require you to purchase building insurance to protect the basic home structure. This is typically a loan requirement because the building is what the lender is insuring and they want to protect their investment until you’ve repaid the mortgage.
However, while house insurance for the building structure is typically required, most lenders mention nothing regarding contents insurance. Unfortunately, this often leads to home owners not realizing the importance of protecting their belongings and leaves them vulnerable to future disasters such as floods and fires.
How to Avoid Financial Hardships
As a new home owner, you must not only protect the building but also the contents you’ll keep inside the house. To do this, you must assess the value of your items and select the correct form of contents insurance to protect them. While contents coverage is separate from building insurance policies, most insurers allow policy holders to combine their building and contents insurance plans into one home ownership plan. This can be a beneficial way to reduce payment and policy renewal complications.