If we look at the legal aspects of home ownership, you don’t need home insurance. However, there are certain cases where you would need home insurance for specific tasks like getting a mortgage. Since home insurance is expensive, we get a lot of questions from people asking us when they need home insurance. On this page, you will find all the answers to the question, and this will also help you decide if you should buy home insurance or if it is something you can skip.
When You Have a Mortgage or Loan?
If you need a financer to provide you with a home loan, they would also like to protect their financial interest. To protect the underlying asset, you would need home insurance coverage. In such cases, home insurance will help the investor protect the home. In case of any natural or manmade disaster, home insurance will take care of the financial loss that may occur. Sometimes, the bank may require you to purchase more than just the home insurance. For example, they may also ask you to purchase earthquake insurance if you live in an active seismic zone. The mortgage company also has a right to buy home insurance on your behalf and charge you for the same.
When You Need Comprehensive Protection?
We are sure you would not be ready for a financial loss arising from natural or unnatural causes. In such a case, home insurance becomes a great tool to protect your interest. Even if you don’t have a mortgage, you would still want to protect your home. Home insurance protects your house and the stuff inside the house. In addition, the policies usually offer you expense coverage to find alternative lodging while your home is being repaired. Apart from these three, home insurance will also take care of the legal bills arising from the property damage.
When You Need Additional Coverage?
There are times when you would want additional coverage. These usually include more than just the coverage defined in the pointer above. In such cases, you can always get add-on coverage to your home insurance. This is very similar to purchasing car insurance. Under the add-on coverage, you can get Dwelling Coverage and Other Structure Coverage, covering any structure around the house. You can also select Personal Liability Coverage, which will cover accidental damage to anyone’s property because of your home. Another popular add-on cover available is Guest Medical Protection which will cover any accidental injury to the guests in the house at the time of the accident.
Final Verdict
We have shared the three most basic reasons why you need home insurance. We are sure you understand the risks associated with home ownership, and you would want to mitigate these risks. Home insurance is a must to have as it protects your asset and saves you from any liability arising out of the home ownership. Even if you don’t have a mortgage, we recommend buying home insurance for your home. Do let us know in the comment section if you have any other questions about the home insurance.
