Why I Pay More for My Homeowners Insurance Than Necessary

Extra protection is worth paying for extra premiums.

My homeowners insurance premiums are pretty expensive -- despite the fact that I shop around each year for insurance quotes and compare rates to try to get the best deal. But I don't mind that I am paying high premiums, and the reason for that is because I've actually chosen to make my insurance more expensive than it needs to be.

Why would I want to buy more homeowners insurance than necessary and increase my insurance costs? Let me explain.

Paying more than I need gives me peace of mind

I've chosen to buy a lot of insurance coverage -- specifically, I have a lot of liability protection.

Liability coverage is the type of home insurance that pays out if something goes wrong and someone is injured on my property.

I purchased a lot of it, not because I plan to have anyone get hurt, but because I know that things could go wrong -- especially since we have a lot of guests and workers in and out of our home. Plus, we live in an area where there are a lot of trees that could potentially fall, and we have a swimming pool, which creates an added risk, even though it's securely fenced. We also have dogs, and although my dogs are the friendliest and most docile animals you could ever meet, surprise dog-bite incidents do happen, and home insurance covers those, too.

I know that if I purchased less liability insurance and something went wrong, a person who was hurt by the incident could file a claim against me. And if their damages exceeded the policy limits of my insurance coverage, I could be held personally responsible for covering any additional financial losses they incurred. This could include providing compensation for medical bills, lost wages, and even pain and suffering.

I don't want to end up in a situation where my assets are at risk and I could have my wages garnished or a lien put on my property to satisfy a judgement that results from injury claims that my insurance won't pay. Having a substantial amount of liability insurance coverage helps ensure that this won't happen to me. I'm willing to pay for that added peace of mind and for the confidence of knowing that if the absolute worst happens, my insurance will take care of the losses that someone incurs due to an injury.

Decide what's the right amount of insurance for you

Of course, no one likes to think about anyone getting hurt at their home -- but accidents happen every day, even to careful homeowners. Having the right insurance is just a smart way to ensure that an unexpected disaster doesn't also become a devastating financial tragedy with a lifelong impact.

Homeowners should always consider their income and assets when deciding how much liability coverage is right for them -- and remember that sometimes paying more to offload extra risk onto an insurer is well worth it.