Faqs
Why should I buy homeowners insurance?
Home can be considered as the person's most valuable asset and protecting it from any damage or loss financially is definitely the first thing a wise person would do. You cannot predict or protect your house physically from fire, theft, rainstorms, tornadoes, earthquakes or terrorist attacks. But you can protect yourself from suffering financially when such things happen by having your losses paid out by the insurance company against a certain premium. Besides, most mortgage loans are given out with the condition of the home to be insured, so there's no escaping homeowners insurance if you're financing your purchase.
What risks does the homeowners insurance protect you from?
A homeowners insurance policy will protect your house and any structures on your property; your possessions contained in the house and third parties visiting your home (guests, workers, etc.) from certain damage, loss or injury respectively. However, the type of risks depends on what is included in the policy itself. For example, if you don't have flood coverage included in your homeowners insurance policy then you won't be paid if your property gets damage during a flood.
Does redesigning your house means you have to re-tailor your homeowners insurance policy?
Yes, it does. In case you already had an insurance policy and have redesigned your house or installed new features like additional ventilation systems or fire alarms, these modifications should be introduced into your policy. Some modifications can actually reduce your premiums (like installing video security system, which will raise your protection against theft). However, in case you haven't informed your insurance company about the modifications and taken certain damage due to different circumstances, there may be situations when the insurer will refuse to pay the loss because of the unreported modifications.
Will it be cheaper for me to combine homeowners insurance with auto insurance with the same carrier?
Yes, in the majority of cases. Most insurance companies tend to offer substantial discounts to customers who are getting more than one type of insurance services with them, for example auto insurance and life insurance, or health insurance and homeowners insurance. The more types of coverage you bundle up the higher will be your discount. So if your auto insurance carrier offers homeowners insurance services you should consider getting the policy form that company. Even if it's not the cheapest you find when shopping around with different companies, the discounts offered when getting more types of insurance from a single company will often compensate the difference.
Can I own a home without homeowners insurance?
Unlike driving a car, you can legally own a home without homeowners insurance. But, if you have bought your home and financed the purchase with a mortgage, your lender will most likely require you to get homeowners insurance coverage. That’s because lenders need to protect their investment in your home in case your house burns down or is badly damaged by a storm, tornado or other disaster. If you live in an area likely to flood, the bank will also require you to purchase flood insurance. Some financial institutions may also require earthquake coverage if you live in a region vulnerable to earthquakes. If you buy a co-op or condominium, your board will probably require you to buy homeowners insurance.
After your mortgage is paid off, no one will force you to buy homeowners insurance. But it doesn’t make sense to cancel your policy and risk losing what you’ve invested in your home.
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