Learning the Benefits of Homeowners Insurance the Hard Way

Have you ever known such bad luck? Johnny B decided not renew his homeowners insurance because he thought that there were better things he could do with his money. The toss up was between homeowners insurance and a luxury weekend away and the homeowners insurance lost.

While Johnny B was on holiday an uninsured car ploughed into the side of his house (which was, by now, not covered by homeowners insurance) taking out the kitchen along the way. The car was left in place to prevent further damage to his home but this meant that it was causing an obstruction to the highway.

Johnny B returned home to find that because he took the risk of not renewing his homeowners insurance policy he not only had to find the money to rebuild part of his home but he also had to pay compensation for the obstruction to the highway.

Within a few minutes of arriving home a passer by decided to enter Johnny B's home to express their concern over the dangers of having a car protruding from the house. As he crossed the doorstep the passer by tripped and landed on his outstretched arm which broke immediately. Of course, if Johnny B had had homeowners insurance he would have been covered for the ensuing legal claim!

The damage to Johnny B's kitchen had resulted in a burst water pipe which had flooded the whole of the downstairs of his home. Unfortunately, the insurance for his personal possessions had lapsed as it had been part of his homeowners insurance policy.

Johnny B was not a rich man and had the maximum level of mortgage on his home. Without homeowners insurance he was unable to fund the cost of the repairs or cover the legal claims and had no option but to put his home up for sale. With such extensive damage, the value of Johnny B's home was greatly reduced and there were very few people interested in buying his home so he had to sell it for less than it was worth.

Because Johnny B's mortgage was so high the money he got from selling his home didn't pay off the mortgage so he had to house share in a horrible part of town to be able to afford to repay what he still owed. Johnny B learned a very hard lesson when he decided to risk not having homeowners insurance, one that wrecked a good part of his life.

I will confess that in this instance it's just a story although I have known someone who experienced a similar scenario. The moral of the story is too never under estimate the value of your homeowners insurance. You might go for years or even a lifetime without ever having to make a claim against your homeowners insurance policy but then again that accident waiting to happen might be just around the corner!

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