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Asking if homeowners insurance is required by law is similar to asking if applying sunscreen is important. Home insurance is not legally important. Yet, like buying sunscreen, house insurance can help you avoid many long-term issues. Let’s dive into the frequently asked homeowners insurance questions.

Why is Home Insurance Important?woman drinks coffee in her new home knowing her house insurance is right for her

If you are a homeowner in this country, your home is likely your most valuable personal property. Hence, homeowners insurance protects that asset long-term— especially when your home is destroyed by a covered peril such as winter storms, fire, or earthquake.

Is Home Insurance Required by Law?

No, home and house insurance is not required by law. This case differs from auto insurance, which demands specific requirements for the amount of personal property coverage needed before you can start driving your car.

Yet, you must note that the law allows mortgage lenders to require borrowers to purchase homeowners insurance coverage. For most lenders, borrowers must present proof of the homeowners policy.

Is Homeowners Insurance Required for Mortgages?

Yes, homeowners insurance is required for mortgages. When lenders loan you a certain amount for a home, they take a financial stake in the property. If a storm or any other unforeseen disaster causes property damage, having a house insurance policy in place can help secure your investment.

You might also be required to include flood coverage, since standard house insurance policies often do not cover flood damages or expenses—this is especially true if your home is located in a flood plain.

Earthquake insurance and flood insurance are other types of liability coverage typical homeowners might have to purchase, particularly if they have a mortgage, so check with your insurer to find your best option.

Are There Any Reasons to Purchase Homeowner Insurance?woman happy with her home insurance costs reads her bill at her table

As stated earlier, house insurance can protect you financially in the long term. It prevails more if you need to replace or repair your home after an insurance policy should have covered an insurance claim. Besides various mortgage lender requirements, a standard homeowner insurance policy should offer financial protection in certain key areas:

Personal Property

A home insurance cover can also apply to your belongings. You can be covered for a specific amount when your items are damaged in a covered loss. However, you may need a policy rider for valuable items like electronics or jewelry.

Additional Living Expenses

In this case, extra living expenses like replacement costs are covered if you need to stay somewhere else during the replacement or repair of your home after a covered loss.

Dwelling Coverage

In the case of home or house insurance, the structure of your house is covered. If there is any cover damage, you can get reimbursed for repairs by filing a claim.

Personal Liability

If someone gets injured on your property due to negligence, they can file a lawsuit against you to cover their medical expenses. A homeowners insurance policy can be helpful in this case. It provides guaranteed liability insurance, which pays if your ignorance is responsible for a renter’s injury.

Start Protecting Your Home Through Home Insurance Today!

As explained above, home and house insurance is not legally required but can offer financial protection in many ways. So, if you love the securities and benefits that come with it, you should consider getting one. And if you have more questions about home or car insurance, feel free to contact us at Home and Auto Resources immediately.


Have a question we haven’t considered yet? Fill out our contact form and we’ll get back to you!