Homeowners insurance typically provides up to $250,000 in coverage in instances where your home or possessions have been destroyed in a disastrous event. If you’re without it, you’ll have to cover these costs all on your own. However, this coverage isn’t always optional in some cases.
Is Homeowners Insurance Legally Required?
There is no law stating that your home has to be covered under homeowners insurance. While not mandatory, you need to consider it. The coverage could spare you from diminishing your life savings from having to cover repair and replacement costs.
What Situations Does Homeowners Insurance Provide Coverage For?
The fact that your home is damaged isn’t the primary concern in the eyes of your insurer. How your home was damaged is the most important factor, because it can make the difference between reimbursement and receiving no coverage at all.
Events such as damage from fire, tornados, storms, and falling objects are covered under homeowners insurance. However, floods and earthquakes are not included in this policy. Flood and earthquake insurance policies are sold separately.
When Is Homeowners Insurance Required?
While not a legal requirement, it may be required by your mortgage lender. Your mortgage lender has a vested financial interest in your home, and would suffer financial losses if it were damaged. If you’re about to take out a mortgage, your lender will require proof of homeowners insurance.
What If I Want To Take Out A Mortgage Without Buying A Homeowners Policy?
Mortgage lenders have legal rights when it comes to the terms of the mortgage. If you don’t get a policy of your own, they are able to purchase a homeowners policy on your behalf, and include the monthly insurance rates as part of your mortgage. If you stop paying premiums on the homeowners policy, your lender can buy it and charge you for the premiums you missed.
Another type of insurance is force-placed insurance, which is a form of homeowners insurance your mortgage lender may purchase for you to pay premiums for. It’s better to get your own policy instead, because force-placed coverage only covers the building itself. It doesn’t cover your possessions, and it doesn’t offer liability coverage if someone were to get injured on your property. Despite this limited coverage, force-placed coverage will cost you more per month.
We’ll Help You Get The Homeowners Coverage You Need
When you contact All Things Insurance, we put you in the driver’s seat when it comes to your coverage. With us, you’ll have coverage that will help with repair and replacement costs at a greater value than you’ll find anywhere else. Call us today at (763) 645-5450 for more information about homeowners insurance.