By Kais Parson
Home insurance can seem like money thrown down the drain, so we investigated the alternatives to see if it’s still worth it in 2021.
Everyone worries that something will go wrong with their property. Your home is the largest purchase you might ever make in your house. Even if you are a real estate investor, spending so much on a large purchase like this causes immeasurable worry. The urge to underwrite our investment with insurance, therefore, is only natural. But is home insurance worth it?
Home insurance is an ongoing cost that not everyone can stomach. Here’s a little more on the costs and benefits of home insurance, and some alternatives you can depend on, should things go wrong.
How Much Does Home Insurance Cost?
According to the Money Advice Service, the average UK spend on home insurance is approximately £140 per year. They also point out that the average UK household owns £35,000 of stuff. When deciding if home insurance is worth it for you or not, consider the costs of the things you keep in your home. Could you replace them if things went bad for you?
Deciding factors in whether home insurance is worth it for you, can include lots of key elements. Do you live in a dangerous area, for example? If you do, then insuring against the obvious dangers will see a good chance of return on your investment. If you live in a low risk area – no floods, earthquakes, or tornadoes – then your need for insurance is slightly lessened.
Money Supermarket put the cost of home insurance at around £2.70 per week. If you have plenty of costly possessions, this is a small fee to protect yourself against the cost of damages. IF you have few possessions and aren’t worried about the bricks and mortar of your building, insurance can seem like an added cost you don’t need.
Alternatives for those with no Insurance
If you decided to go without insurance and now you need a cash pot to fix damages, you are in the right place. These alternatives to taking out insurance long term can help you get access to cash, fast.
The HELOC
If you haven’t heard of a HELOC before, this stands for Home Equity Line of Credit. As far as we know, https://www.selinaadvance.com/ are the only company in the UK currently offering them. The HELOC is a Canadian and American way of borrowing up to 80% of the value of your property. The loan is given as al ump sum, where you only pay interest on what you borrowed. This is preferable for repairs since you can keep going back and borrowing more if you must.
The Standard Loan or Overdraft
When it comes to financial products that you need quickly, an overdraft can arrive in minutes. If you make enough money, your bank can approve this for you online, without an interview. The standard loan takes longer and is less attractive than the HELOC in a home improvement situation. If you overrun your budget, you will have to go back and apply for another loan. The Overdraft gets around this, but the fees may be higher.
