{"id":1157,"date":"2018-10-31T17:05:20","date_gmt":"2018-10-31T21:05:20","guid":{"rendered":"https:\/\/www.protectiveagency.com\/blog\/?p=1157"},"modified":"2024-02-24T22:17:07","modified_gmt":"2024-02-25T02:17:07","slug":"home-insurance-mandatory","status":"publish","type":"post","link":"https:\/\/www.protectiveagency.com\/blog\/home-insurance-mandatory\/","title":{"rendered":"Is Home Insurance Mandatory?"},"content":{"rendered":"

Families today are always trying to find ways to stretch their budgets. Some may clip coupons, some may follow a strict budget, while others try to cut down on costs where they can. Often looking at what they feel they do not need. This includes cutting insurance costs to save.<\/p>\n

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Many homeowner\u2019s often wonder if they must carry insurance on their homes. While getting rid of monthly premium may provide a short-term cash flow solution, it could backfire in the event of a significant event. \u00a0But before you cancel your policy, remember while the state does not require it like auto insurance<\/a><\/u>, there are situations where you will be required to have it.<\/p>\n

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Situations You Are Required to Have Home Insurance<\/strong><\/h4>\n

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For instance, if you carry a mortgage on your home, the lender may ask that you carry coverage as part of the loan terms. Generally, the amount of insurance would need to be at least the amount that you are borrowing for the home. The reason being if a disaster strikes, such as fire, their investment will be somewhat better protected.<\/p>\n

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Even if you don’t use traditional lending, and in an owner-financed situation, you might be asked to carry home insurance during the length of the loan. \u00a0While home insurance isn’t mandatory, it indeed serves a purpose. Maybe you have paid the mortgage off on your home, and you are wondering if you should still carry insurance. Let’s look it at this way, if your house burned to the ground tomorrow would you have the funds to rebuild or purchase a new home. If the answer is no, then having a homeowner\u2019s policy in place is a wise move.<\/p>\n

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Understanding Home Insurance<\/strong><\/h4>\n

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First, it is essential to understand what home insurance<\/a><\/u> is and what it isn’t. \u00a0Home insurance is for the big stuff; it’s not a home warranty. For example, let\u2019s say you are having trouble with your air conditioning unit or it stops working because of age, this would not be covered under your homeowner\u2019s policy. But may be covered by a home warranty coverage plan. However, if lightning in a storm damaged your unit, it may be covered by your homeowner\u2019s insurance. \u00a0That is the purpose of insurance: to help protect you when unforeseen disasters like fire or storms wreak havoc on your home.<\/p>\n

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However, it’s not just natural disasters or fire that insurance can help protect you from. Homeowner\u2019s insurance will also help cover you if someone is hurt on your property as well. \u00a0Maybe your child has a friend over to play. And while the kids are off playing as children do, your visitor fell down the stairs.<\/p>\n

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Unfortunately, during the tumble, they broke their arm. Having the proper homeowner\u2019s coverage in place could help you cover their medical expenses. Maybe you don’t have kids, but you entertain frequently. The liability on your homeowner\u2019s policy would kick-in for you against an adult getting injured as well.<\/p>\n

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Other common perils covered by most homeowner\u2019s insurance include:<\/p>\n

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