Homeowners insurance, though costly, has the potential to save you millions of dollars over your lifetime. Many people think that they do not need home insurance because they are careful and responsible owners. Unfortunately, there are many bad things that can happen to your home that are completely out of your control.
The most uncontrollable force that can destroy your home are natural disasters. Everybody is vulnerable to earthquakes, floods, and hurricanes. These disasters can ruin your home, and without insurance you would have to come up with the money to build a new home or buy a new home. Most people do not have this much money to spare. With homeowners insurance though, the insurance company will reimburse you for all of the damaged property that you had insured.
Note: Always insure your home for the cost that would be required to replace your home, not the market value. This is because if the market value of the home is below the cost needed to replace the home at the time of the disaster, you will have to pay for the difference.
Also, homeowners insurance covers damaged items within the home that are damaged due to a disaster. So if you have an electrical fire in your kitchen, insurance will reimburse you for anything damaged, like an oven and floor.
Even one home disaster without insurance can bankrupt you and make your life difficult for many years.