It May Not Be Illegal to Go Without Home Insurance. You May Still Be Required to Carry It. Here’s Why.
It May Not Be Illegal to Go Without Home Insurance. You May Still Be Required to Carry It. Here’s Why.
Most people are aware that there are minimum levels of auto insurance required to drive a car in most states. These are referred to as “financial responsibility laws” and serve to protect the insured and other drivers. Actual laws and minimum levels of coverage can change from state to state, but coverage is mandatory to drive legally. There is no such law regulating home insurance, yet you may still be required to carry it.
Why? In part, unlike driving a vehicle, you are not putting anyone at risk by owning your own home. Well, except for your lender who is taking a risk by financing you. It is the lender who may require you carry home insurance.
When most people purchase a house, they finance it through a bank or a mortgage company. Homeowners who finance properties are frequently required to carry home insurance to protect the interests of the lender. The lender will not approve the loan if the borrower does not agree to purchase homeowners’ insurance. In fact, if there is a point somewhere along the road when a homeowner cancels or allows their home insurance to lapse, the lender can forcibly place home insurance on the property at the expense of the borrower. This insurance is usually much more expensive than what a homeowner can find on their own.
So, while home insurance is not a legal requirement, a mortgage company can mandate it to qualify for a home loan. This doesn’t mean you don’t have options, however. You still control who you decide to insure your home.
If you are struggling with money and bills, the last thing you want to do is get behind on mortgage payments or allow your home insurance to lapse for non-payment. You may, however, be able to find less expensive alternatives by contacting one of our independent home insurance agents. The reality is, the home insurance you have may not be your most affordable option. Contact us to get a no-obligation, free quote. We look forward to assisting you.
Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder
Search All Blogs
Search All Blogs
Read More Blogs
Beyond “How Was Your Day?”: Engaging Your Kids with Deeper Questions
Get your kids talking with these open-ended questions.
The Rise and Fall (and Possible Return?) of the American Minivan
The minivan’s journey: from family icon to potential comeback.
Out with the Old: 7 Home Upgrades That Pay You Back
Upgrade these 7 outdated home features now.
America’s Linked Cities: Six Communities Forever Entwined
Discover America’s famously linked cities.
Navigating Price Increases: How to Retain Customers During Inflationary Times
Retain customers during price increases with these tips.
Beyond the List: What Your Bucket List Really Says About You
The hidden meaning and power of your bucket list.
Taking the Wheel: How You Control Your Car Insurance Costs
Control your car insurance costs with these tips.
Beyond the Walls: Maximizing Your Home’s Outdoor Living Potential
Unlock your home’s outdoor living potential.
The Welcome Mat: 5 Surprising Values of Your Home’s Unsung Hero
The surprising value of your welcome mat.
Adapting for Tomorrow: How Businesses Can Thrive Amidst Constant Change and Tech Evolution
Business success: adapting to change and embracing technology.