In this day and age, having home and contents insurance is absolutely vital. The reality however is that times are tough for all households and cutting down on expenses is at the order of the day. The problem is that so many people are being forced to cut down on essentials and in my opinion house and contents insurance is an essential expense that you cannot afford to cut out completely.

There are a number of distinct risks that can ruin you financially if you do not have adequate insurance. If you have insurance however it can really save you. Here are some of the biggest risks that you are exposed to daily.

• Natural Disasters

Whether you live in an earth quake zone, a hurricane zone or a tornado zone its important that you are insured adequately. Even if you don't live in areas that are prone to natural disasters. In many ways, not living in an area that is known for disasters exposes you to more risks. Flood damage can ruin your home and regardless of where you live it can happen to you at any time.

• Fire

Fire is a very real and imminent danger that we all face daily. While modern houses are much better protected, older properties tend to be at a much greater risks due to faulty wiring. Fire damage is something you can't really prepare for and most of the causes of fire damage happens unexpectedly. Again, home and contents insurance is the only real protection you have here.

• Theft and Burglary

While home insurance is absolutely critical, contents insurance is often seen as a luxury. In many ways it is, but if you think of the increase in crime rate in so many parts of the world its important that you come prepared. If you think of all the valuable in your home and what their replacement value is then getting insurance is no longer a luxury.