Home insurance is something that we all should have. It’s kind of like a safety net for the just in case. You may never have to use it but if you do you will be glad it’s there.
Tough times
Seemingly week on week, the newspapers are filled with more bad news about the cost of living increasing at an alarming rate, while in real terms people’s wages and investments are failing to meet the higher demand. As we have been living through this tough financial period for a couple of years now, many households have found ways to tighten the belt and adapt to small hardships by decreasing monthly outgoings in any way possible. It’s easy to think that home insurance might be one of the things not to make the cut when assessing what we can afford to get by without– poorly thought out or outdated policies can be costly, and after all there is no mandatory legal requirement to have one anyway. With no apparent end to the country’s economic stagnation in sight, it’s perhaps appropriate that we consider why home and contents insurance still matters to us in these tough times.
Safety first
According to some sources, up to five million homes in the UK have no insurance at all. While this may seem like added incentive for you to give up your policy, consider for a moment what would happen if one of these home-owners was your next door neighbour, and their property caught fire while they were on holiday this summer. If your house was one of several others that was damaged in the blaze, the cost of damage that your non-insured neighbours would legally be liable for could stretch up into six or seven figure sums. Unless they happen to be incredibly fortunate people with that kind of money to spare (they were on holiday after all!), they will be unable to meet the cost of these repairs. The sale of any remaining assets in their possession, after the loss of what in most people’s scenario is their primary investment is unlikely to bring you or your family much re-numeration.
Future difficulty
The knock-on effect of such a scenario is hard to over-estimate. You would be looking for either a large instant loan to cover the cost of repairs yourself, or a forced sale of your property for a fraction of its market value. If you stayed on in your home and tried to make ends meet, you could end up getting behind on your mortgage payments. This could result in your credit rating taking a further battering, and even result in the loss of your home. While the above scenario is obviously a worst-case hypothetical one, it is by no means beyond the realms of possibility.
The message here is a simple one: home insurance is as important now as it ever has been, and should be near the top of the list of monthly outgoings for any prudent household.
Toni Patton
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