Some homeowners in Michigan have a choice that some people in other states don’t have. In certain situations, Michigan homeowners aren’t required to have insurance on their personal property or home.
While Michigan law doesn’t require homeowners carry this insurance, many lenders will require it if you’re financing the cost of your home through a mortgage. That’s because it helps protect their asset, since your home isn’t technically yours until it’s completely paid off.
Homeowners who aren’t required to carry the insurance, though, may be tempted to cut this bill out of their monthly budget.
On the surface, it might sound like a good idea, especially since the average home insurance policy in Michigan is roughly $1,120 per year for a $250,000 policy. That’s roughly $93 each month that could certainly be put to good use elsewhere.
But, there are a lot of big risks you’d be taking if you decided to not carry home insurance on your property. Here are some of the worst things that can happen if you don’t have home insurance.
It Could Sink You Financially
The most obvious risk of not having home insurance is losing the home entirely if a disaster strikes. If your home suffers significant damage from wind, fire, hail, water, a tree falling or other natural disaster, insurance helps you pay for the repair or total replacement of the dwelling.
In addition, many home insurance policies will help you pay for the costs associated with living somewhere else temporarily while your home is being fixed.
If you don’t have home insurance, the entire brunt of those costs would fall directly in your lap. The Insurance Information Institute reports that the average lightning and fire damage costs $68,322. That’s a significant financial burden that a lot of families might struggle to pay for.
You Could Lose Valuables to Burglary
Most people think about home insurance as protecting the actual structure and property on which the structure resides. But, home insurance also provides protection for the items inside the home.
There are, unfortunately, instances where you might lose valuable possessions located inside your home without the home itself being damaged. The most common example of this is a burglar who enters your home and steals possessions such as jewelry, electronics, clothes and more.
While it can be devastating to have these items stolen, most home insurance policies will cover those losses, allowing you to replace them with new items. This helps to ease the burden of going through a traumatic incident such as a home burglary.
If you don’t have home insurance, though, you won’t have any help replacing some of these items, which may be essential to your daily life.
You Could Be Legally Liable
Another aspect of home insurance that people often forget is that it helps protect you if someone is hurt while they’re on your property. This could happen if you have a pool, a trampoline or a dog.
If someone else is hurt on your property by one of these things — or something else — they can sue you for damages. This bill could get quite expensive when you consider the other person’s medical expenses, lost wages and psychological trauma they may have incurred.
Home insurance policies will typically provide at least some level of liability coverage that’ll pay for these expenses. Most policies provide at least $100,000 in liability coverage, which can go a long way in case something like this happens.
Your Home Could Be Harder to Sell
An indirect effect of not having home insurance is it could make your home less attractive to potential buyers. Again, there’s nothing that requires you to have home insurance when you sell your property. But, an active home insurance policy goes a long way in engendering confidence in prospective buyers.
When people enter into an agreement to purchase a home, they’re doing so assuming that the home will be in the same condition when it becomes theirs as it was when they first saw it. An unexpected disaster or damage to the home in the period between initial agreement and final sale would throw a wrench in that process, of course.
But, when you have home insurance, the buyers can feel comfortable knowing that whatever damage did occur will be fixed up to par. If you don’t have home insurance, it may convince people to look elsewhere, as it might not be worth taking the chance.
Work with a Trusted Home Insurance Company
Your home is most likely one of your most important assets, if not the most important one. Because of this, it’s essential that you protect that asset any way you can.
Even if you aren’t required to carry home insurance under Michigan law, it’s still a great idea to do so. No one likes paying extra bills, of course, but home insurance ensures that your most valuable asset, and one of the things that brings you immense joy in life, will always be protected.
At Signature Insurance, we have been providing Michigan homeowners with excellent home insurance coverage for years. Our team of insurance experts works hard for each and every one of our customers, educating them on their options and finding the best policy for them.
Contact us today to find out more about our home insurance policies and to get a free quote.