Home Insurance: Is it Required by Law?

A home is one of the most valuable purchases that you are ever going to make. In addition to being a location where you are going to make a bunch of memories, it is also a valuable financial investment. If something were to happen to your home, would you be able to cover the value of your home with cash? The likely answer is no. That is why it is important to find home insurance. At the same time, is home insurance actually required by law? There are a few important points you should keep in mind.

Home Insurance Is Not Actually Required by Law (But You Still Need It)

It may come as a surprise to people that home insurance is not actually required by law. After all, if you want to operate a motor vehicle on the road, you have to have car or truck insurance. If you do not have home insurance, you are taking an unnecessary risk. Think about how expensive your home would be to replace. There is a good chance you will not be able to replace your home with cash alone.

Therefore, if something were to happen to your home, you would have to take out a second home loan. Essentially, you would have a second loan covering your new home while you would still be paying off the loan on your home that is now gone. In order to avoid this financial catastrophe, you should take out a home insurance policy.

Your Lender Will Probably Require You To Have Home Insurance

Unless you purchase your home in cash, you probably do not have a choice. You will have to have home insurance. Your lender is probably not going to give you a home loan unless you agree to purchase home insurance. After all, if something were to happen to your home and you were not able to pay back that loan, your lender would lose a significant amount of money. Home insurance is important for protecting not only your home but the lender as well. Therefore, there is a good chance your lender will probably have some connections throughout the home insurance industry. If you are looking for a home insurance policy, you may want to start by checking with your mortgage company.

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Find the Right Home Insurance Policy for You

In the end, there is no law that states you have to have home insurance. At the same time, it is still a good idea for you to have it because of the financial value wrapped up in your home. Furthermore, if you still have a mortgage from a bank or credit union, they will probably require you to maintain home insurance as a condition of your loan. Therefore, you have to take the time to find the right home insurance policy to meet your needs. Make sure you compare the benefits and drawbacks of all of your options before you make a decision. Call a professional here at InsuranceHub or get started with a quote online today.