Are you wondering whether or not homeowners insurance is mandatory? Good question! Let's dive into this article and find out the answer.
Are you on the verge of becoming a homeowner? Have you reached the stage in your quest for homeownership where you're looking into all the other asides that you'll have to engage with as a part of the process?
When it comes to homeownership costs, insurance is right up there with furnishing and the actual selling price of the house. But in the scramble to find answers to questions like "Where can I find an insurance agency near me?" and "Can I bundle my car insurance with my house insurance?", there's a question that people often don't ask:
Is homeowners insurance required?
The short answer is "No.". And the longer answer is "No, but you should probably still get it."
We're going to give you a summary of homeowners insurance, what it covers, and whether it's a legal requirement. Just keep reading.
When you hear people talking about "homeowners insurance", they're referring to the insurance policies that are designed to help with the cost of repairing or rebuilding your home if your place is ever damaged by an event that you're insured against.
Most of the time, however, your insurance won't just cover your building —it'll also cover your personal belongings while offering protection against personal injury lawsuits.
If your house is ever burned down in a fire or destroyed in a hailstorm, chances are that you'll be looking to claim coverage through this type of insurance. But although this is important, you can still technically own a house legally without carrying homeowners insurance.
Most people don't look at monthly expenses they don't have to pay for and think, "Where do I sign up?" However, homeowners insurance is often different. There are three common reasons why people will often choose to pay for homeowners insurance:
According to Yahoo Finance, around 62% of homeowners have a mortgage.
Even if you're technically the person whose name is on the deed of the house, your house is technically co-owned by you and your lender until your mortgage is totally paid off. If you have the misfortune of having your house burn down, your lender will also be losing out on their investment.
In order to cover their bases, many lenders will make the mortgage approval conditional on the home being insured.
And depending on other details like whether your house is near a body of water or located near a fault line, lenders may specify additional types of insurance before they'll agree to finance the home purchase.
As we've mentioned before, once the mortgage is paid off and you own your house free and clear, you can get rid of your homeowners insurance policy without any problems.
But do you want to call it quits with your policy at that point?
The average cost of renovating a kitchen is $25,583 according to HomeAdvisor. If renovation expenses are often priced high enough to make homeowners pause, make savings plans, and consider loans, imagine the cost of replacing the whole structure.
Homeowners insurance makes it possible for you to be compensated for the cost of fixing your building.
Even if the odds are incredibly low, you never know if today could be the day that someone takes a nasty spill while walking up your driveway. And if the person with the broken leg or dislocated collar bone were to sue you, there are few more devastating financial outcomes than having to cover legal fees and settlement costs out-of-pocket.
To that end, many homeowners insurance policies will help cover litigation-related costs.
Let's assume that you've decided to take out a homeowners insurance policy. You've counted the costs, you want added security, and now you're all in. There are two general options when it comes to insurance:
You can use a broker or you can go to an insurance provider.
If you've been asking questions like "Where can I find car insurance near me?" or "What insurance agencies are near me?", then this section is for you. Experienced insurance brokers bring certain advantages that are difficult to overlook.
Insurance providers can help you find the policies that fit best with what you have to offer. But at the same time, it's not unusual for people to run Google searches with specific inquiries like "insurance brokers near me" or "insurance agencies near me".
Because we've established partnerships with multiple insurance providers. This in turn means that we have more policies and plans to choose from when we recommend insurance packages to you.
When you buy a house, your mailbox pretty quickly becomes full of what can only be described as bills, bills, and more bills. Even when you need homeowners insurance, the last thing you want or need is to overpay for your coverage.
One of the perks of working with an Econosurance agent is that we can look for policies that will give you the coverage you need at an equally amazing price.
For most folks, insurance can be pretty confusing. Sometimes the policy you think you're getting doesn't provide the coverage you think it does. And as a result, it's way too easy to have insurance for years only to realize after the fact that you have a coverage gap.
Brokers and agents know the ins and outs of the insurance industry and they know exactly how to make sure that you get the coverage you're looking for. It's like having a personal shopper and an insurance advisor in one.
Even though lenders will often require you to take out homeowners insurance before they'll approve your mortgage, homeowners insurance isn't technically required. Simply because houses are costly to repair and expensive to rebuild, many property owners find that homeowners insurance is worth pursuing.