Are you on the fence about purchasing a homeowners insurance policy? If so, you’re not alone. An estimated 5% of homeowners (which comes in at about 3.5 million people) don’t have homeowners insurance.

Does that mean that it’s a good idea to forgo homeowners insurance? It does not. Like other types of insurance, it’s easy to assume that you don’t need it until you do, and without it, you can find yourself facing serious debt.

Why take our word for it when we can spell it out? If you’re still on the fence, we encourage you to stick with us while we talk about the risks of not having homeowners insurance.

Read on for the five legitimate dangers you will face if you don’t purchase a strong homeowners insurance policy.

1. From the Start: Inability to Secure Financing

While there is the occasional buyer who can purchase a home in full cash upfront, this is not the typical home-buying scenario. In fact, cash buyers represented 25% of all homebuyers in the US this time last year, and this was considered a record-high number.

What does this have to do with homeowners insurance? Most buyers will need to secure financing in the form of a mortgage in order to purchase a home. In order to secure this financing, you will need to commit to a homeowners insurance policy.

Lenders want to know that their investment (and your debt) is protected. When you choose not to purchase homeowners insurance, you cannot get a mortgage. Unless you can pay in full with cash, this is going to prevent you from buying a home.

2. Racking Up Huge Costs for Repairs

It’s easy to assume that the worst won’t happen to your property. If it’s in good shape upon purchase, you aren’t likely thinking about the possibility of a pipe bursting and flooding your basement or a storm destroying your roof. Yet in your experience as a homeowner, you’re almost definitely going to have a major repair on your hands at least once.

Homeowners insurance serves a variety of purposes. One of them is to enable homeowners to make needed repairs to their property over time without going into debt. You pay your monthly premium and, in exchange, receive partial or full funding when needed.

When disaster strikes, you don’t need to go into debt to make your home livable again. Avoid this risk by getting the coverage you need.

3. Leaving Your Property Unprotected

You’re likely thinking we already covered this one, but there’s more to property coverage than meets the eye.

Your property isn’t just the structure of your home, it’s also everything that you own, from your heirlooms to your furniture and appliances. Your property is also the other structures on your property, like sheds, swimming pools, and decks.

Imagine that your house catches fire and you lose just about everything in it. Do you have the money to replace everything that you own? Chances are, probably not.

Homeowners insurance can help you recover all of your property, including your possessions. Some policies can even help you cover the cost of staying somewhere else, like a hotel or apartment, while your property undergoes major repairs to make it livable again. Once again, that monthly premium can save you from massive debt in the event of a disaster.

4. Risking Liabilities in Civil Court

Have you ever been involved or aware of a personal injury case? Perhaps you know someone who was injured in a store and took the company to court, or you know a person who was hit in a car crash and took the other driver to court. Did you know that as a homeowner, you bear certain responsibilities to visitors and that they can take you to court if those responsibilities aren’t met?

Something as simple as a trip and fall on your property can leave you in charge of paying medical bills, covering lost income, and accounting for additional damages. If the injury is bad, these bills can roll in for years to come. Homeowners insurance takes care of this type of liability, providing payout if a visitor has a preventable accident on your property.

5. Letting a Policy Lapse: Risking Foreclosure

Earlier this year, New Jersey had the second-highest foreclosure rate in the nation. Some of these foreclosures may have been preventable had the homeowners continued to pay for their homeowners insurance policy.

As we discussed earlier, your mortgage lender will require proof of insurance before granting you the funds to buy your house. In the years that you’re paying off your mortgage, this remains the case. If you let your homeowners insurance policy lapse, your lender has one of two options, and one of them is defaulting on your mortgage, which can lead to foreclosure.

The other option? Pushing you to pick up a homeowners insurance policy of their choice. When this occurs, don’t expect a cheap insurance policy. They may stick you with a policy that has higher premiums and a higher deductible, which will leave you wishing that you had stuck with the policy you already had.

Get Homeowners Insurance and Protect What’s Yours

Homeowners insurance isn’t something that overly cautious people purchase for no reason. As you can see, failing to get (or hold onto) homeowners insurance comes with some serious risks, many of which can disrupt your finances far more than a monthly premium will.

If you’re looking for homeowners insurance in New Jersey, come to Central Jersey Insurance Associates. Our insurance agency will match you with the best insurance policy for your specific needs, from business insurance to insurance for your home. Contact us today to get started and avoid the risks of being an uninsured homeowner.