Is Homeowners Insurance Required if I Own a Home?

Many homeowners spend days and months thinking about whether to get home insurance. When you have a house to pay for, getting another expense is not a fun idea at all. While there might be more attractive ways you can spend your hard-earned money and have much more fun with the purchase, investing in home insurance can save you tens of thousands of dollars and prevent a potential loss of your house and belongings. In case your area gets hit by an earthquake or a tornado, you’ll be glad that you insured your house.

To answer the title question of whether home insurance is required (by law)—it’s not. However, there are many reasons to purchase home insurance. If you have a mortgage on your property, the lender might require you to have insurance, at least until you pay off your loan. Your lender can actually legally force you to invest in insurance that can cover your mortgage. But that’s not all—having home insurance protects you from life-altering events and financial requirements. If you’re not sure whether to invest, here are just some of the reasons you need home insurance:

Gives you peace of mind

There are so many things that can go wrong in your home, but insurance is there to get your mind off it. Your home is your most expensive and important asset, so it’s better to be safe than sorry when it comes to something happening to it.

Protects you against theft and vandalism

Break-ins can happen to anyone, but with home insurance, you will be protected in case someone breaks in, steals your things or decides to graffiti your house. In case you keep precious items in your home, you will be able to replace them thanks to your coverage. The trauma of having your privacy and security breached will unfortunately remain, but at least you can use the money to replace some of the missing items.

Protects you in case of damage

Unfortunately, the world is experiencing more and more severe natural disasters and extreme weather, so you never know when something can hit your area and cause your house to end up completely destroyed. With home insurance, you will be able to pay for repairs and restore your property instead of being left with nothing but loss. There are other ways for your property to get damaged (accidents, burglary, vandalism, etc.) but you can always rely on your insurance to reimburse you.

When having your stuff replaced, the industry terms within your policy will dictate what will get replaced and how much money you can get for your items. Depending on the terms of your best insurance—replacement cost, guaranteed replacement cost, extended replacement cost or actual cash value (ACV)—you will receive your reimbursement. With a good agent, you will be able to successfully navigate the world of insurance, learn all about these different terms, choose the best policy for you and know how to ask for reimbursement in case something happens to your property.

Pays for your relocation

Let’s say that a storm hit your area, knocked down a tree and made a hole in your roof—you have to move out until workers fix your damage. In that case, your home insurance policy will pay to have you relocated to a safe location. This type of coverage is known as “loss of use” and will help you pay for your accommodation, meals and other living expenses.

Protects you from lawsuits

Typically, in case someone gets injured on your property and files a lawsuit again you, your insurance will cover you. Most policies have a limit of $100,000 in liability insurance, but there are ways you can push that limit up and get additional protection. All in all, your home insurance and liability coverage will pay the injured party and cover damages to the property, as well as your attorney that will defend you in court.

Pays medical bills

In case your grandma is coming to visit but happens to slip and fall on a rock as she’s coming up the driveway and breaks a hip, no one has to worry. Your grandma won’t take you to court, but your insurance will still pay for her medical bills. Most homeowner policies include guest medical coverage and will pay for anyone who’s injured on your property and if that accident is not covered by the general liability policy. Your insurance can pay for different things from ambulance rides and x-rays to surgeries and hospital stay.

Long story short, no, you’re not required by law to have home insurance, but due to all of the reasons above, you should definitely consider investing. It can truly save your property and spare you from horrible financial hardships.