Is Homeowner’s Insurance Required by Law?

As a homeowner, you are not legally required to obtain homeowner’s insurance; however, if you are taking out a mortgage or are currently paying on a home, your designated lender will require that you have proof of homeowner’s insurance coverage.

If your mortgage is paid in full, you do not have to purchase insurance. You must understand, though, that your home is both your largest financial investment and asset; therefore, it is advised that you protect it with homeowner’s insurance.

This type of insurance also protects your personal belongings and the personal liability you hold in case you are held responsible for any type of injury or property damage that stems from your home or on your property.

Mortgage Lenders

No state obligates homeowners to purchase insurance coverage; however, mortgage lenders are allowed to require coverage of a borrower. This coverage is usually required before the closing is done on the mortgage.

If policy premiums go unpaid, the lender you have on your home is actually allowed to purchase insurance coverage for you and will charge you for it, retroactively.

Lenders have a financial-based stake on your property. The insurance covers the investment made in the event that the home is damaged and/or destroyed due to a disaster.

What’s the Worst That Can Happen if I Don’t Have Homeowner’s Insurance?

Homeowner’s insurance is designed to cover both your home and your belongings if damage occurs from a peril that is outlined as covered within the policy.

If you become liable for any type of property damage or injury or if any type of lawsuit is brought directly against you, the insurance policy helps in covering any type of settlement that is involved.

If you do not have this type of insurance and an issue develops, there is a risk that you will have to cover all situations directly out of pocket.

Let’s say that your central heating and air system burns out. Perhaps a section of your home caught on fire. Then, there’s the possibility that – during a storm – a tree went down on your home and is now sitting on your living room floor.

If you have homeowner’s insurance, all of these situations will be covered. If you do not, none of these situations will be covered. Not only will you be responsible, but you will also be responsible for any type of injuries that occur on your property or as a result of situations pertaining to your property. This is not a situation you want to find yourself in at all.

We Can Help

We here at Modica Associates can work directly with you to determine what type of homeowner’s insurance plan is best suited for your needs. We will work to figure out what type of coverage you need and will strive to find the best-suited policy for your budget.  

In addition to homeowner’s insurance, we also specialize in automobile insurance, Brownstone insurance, personal insurance, and more. To learn more, contact us today by calling: 718-855-1836

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