Owning a home is a big responsibility, and one that comes with a sense of pride and accomplishment. Yet, just signing on your mortgage documents isn't enough. You also have to maintain that home long-term. To accomplish this, you'll need to handle the maintenance and pay your monthly mortgage payment. However, you also need to have home insurance. It's one of the foundations of safety when it comes to protecting your finances from loss.
Do You Legally Have to Have Home Insurance?
Although in most states you are required to carry car insurance, there is no law in most areas that says you have to have home insurance. You can legally own your house without having homeowners insurance. However, if you do not have coverage and are sued due to someone being hurt on your property, you could lose your home in covering the costs out-of-pocket. Your financial circumstances would likely be impacted negatively as well.
What About Your Mortgage Lender?
When you sign your documentation with your mortgage lender, you are signing a contract that states you will maintain the home's condition and will maintain comprehensive home insurance. Nearly all mortgage lenders require this. This helps to minimize the risks to the lender should something occur with the home (which is technically their investment). Because this is a legally binding document, in this situation, you are required to maintain comprehensive home insurance. If you fail to maintain it, the lender can take legal action against you to ensure that you maintain coverage.
If you own your home outright and do not carry a mortgage on it, then this does not apply to you. However, should you borrow against your home in the future, you'll need to maintain home insurance.
Home insurance is an important investment because it helps minimize the risk of a substantial loss. Fires, theft, vandalism, flooding and numerous other types of losses can occur. The best option to protect your finances is to maintain comprehensive home insurance.
Get the coverage you need? Call Turrentine Insurance Agency at (281) 476-0557 for more information on Deer Park home insurance.
Can you think of a time when your home insurance policy came in handy? Feel free to share your experiences in the comments section below.