Many home owners dream of additions to and modifications of their living space. Sometimes these are long-range goals worth saving for; at other times, they might simply be pipe dreams. Yet these ruminations are luxuries that have time on their side. Fire, flood, weather-related damage -- or all three -- do not share that gift. Damages from them require emergency home repairs if it is to survive intact. These are startling events that catch us unaware. The following options may help.
Homeowners Coverage
The insurance policy on any given residential property may be unique or maybe common in terms of what sort of repair it will compensate. Most policies offer hazard insurance against fires and the destructive results of wind, rain, snow and hail. Hazard coverage is often restricted to the walls, foundation and roof of the house as opposed to the internal contents. Other coverage applies to different scenarios, including lightning strikes, burglary, explosions, falling trees, vehicular impact and the like. A careful review of the current policy should reveal its accommodation to emergency home repairs.
Savings and Retirement
Prudence dictates the building up of an emergency fund for household and other unexpected contingencies. Tight finances, though, can make such thrift difficult. At this point, the home owner must ask whether other accounts can be tapped for a pricey repair. College nest eggs, vacation savings and even retirement funds are fair game if the urgency of the restoration. Ideally, a reserve set aside for unanticipated crises is the best avenue when physical disaster strikes a house. This means taking inventory of potential catastrophes that could afflict a house and making educated guesses as to their cost. After that, set aside monies according to a realistic budget.
The Last Option: the Bank
If the insurance company will not pay the claim and the personal savings are sparse, a loan becomes the last recourse. If the owners have sufficient equity, i.e. ownership share, in the property, they can refinance and get cash back or, alternatively, get a home equity line of credit behind the first mortgage. Either way, the owners increase their debt load. Personal installment loans and credit cards are other means that have the same effect. Good credit and reliable income is essential for these high-interest products. Again, opting for any of these depends on how pressing the emergency home repairs are.
The worst position home owners find themselves in is one of complete unpreparedness for financial pressures. A long hard look at insurance policies, cash flow and credit history should precede any plan to deal with unexpected home repairs. A house is normally a family's highest valued asset. Keeping it safe and sound is an investment in the future.
This is not legal, financial or professional advice. Please consult a legal, financial or professional advisor for your specific situation.
