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Protecting Your Possessions: Why You Need Insurance

Protecting Your Possessions: Why You Need Insurance

June 27, 2023

Even if you can afford to self-insure against major losses, why should you have to?

Why Coverage is Critical

Homeowners' insurance isn't just to protect against damage to the home itself but also to your possessions. As anyone who has attended a housewarming party can likely attest, outfitting a home with all-new belongings can be expensive. And the cost of replenishing one's belongings after a break-in, fire, flood, or another catastrophic event can quickly reach six figures.

Moreover, high-net-worth individuals (HNWIs) often risk far more than roof damage or a sewer backup. Without some liability coverage attached to a homeowner's insurance policy or an umbrella policy, you could be personally liable for any injuries on your property, or, in some cases, injuries caused by a guest at your home. For example, suppose an intoxicated guest is involved in an auto accident after leaving a party at your home and injuring someone else. In that case, you could find yourself facing a multi-million dollar lawsuit.

Legal fees can be a significant setback even if you prevail in such a lawsuit. And the greater your assets, the more you have at risk.

  • The average homeowner files an insurance claim every ten years[i]. These claims can range from siding damage to fire, flooding, and dog bites. 
  • The average claim payout is less than $9,000. Many whose lenders are not obligated to carry such coverage may wonder whether it is worthwhile[ii].
  • The average homeowner's insurance costs $1,680 annually, and premiums vary by state, from $781 annually in the least expensive state, Delaware, to $3,383 annually in the most expensive state, Colorado[iii].

Selecting Your Coverage Options

Homeowner's insurance generally covers these categories:

  • Dwelling protection
  • "Other structures and equipment" protection (such as a garage, barn, shed, grills, or fireplaces. It may also cover a swimming pool or other recreational equipment)
  • Personal property
  • Liability for damage or injuries to another person or property[iv]

But not all these types of coverage cover everything you might expect. Before purchasing or renewing a homeowner's insurance policy, you should ask:

  • What claims and coverages are excluded? (For instance, many homes in low-lying areas aren't eligible for flood coverage.)
  • If certain coverage is excluded, can it be purchased for an additional fee? 
  • What documentation is required for personal property claims? 
  • Do I need an additional rider to cover expensive jewelry or one-of-a-kind artwork?
  • Do I need an umbrella policy for additional liability protection?

The answers to these can vary based on your unique situation and the insurance options offered in your area. Speak with an advisor from Arazon Financial Group today to determine what’s best for you.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05319558

[i]How Often Does the Average Homeowner File Insurance Claims? (

[ii]Home Insurance Facts and Statistics: Coverage & Claims - ValuePenguin


[iii]Average Cost of Homeowners Insurance (2022) - ValuePenguin


[iv]What Does Homeowners Insurance Cover? | 2022 Guide | U.S. News (