Can I own a home without homeowners insurance?
Home insurance is never required by law, however, the financial institution that holds your mortgage will most likely require your home to be insured for at least the amount of your loan. Lenders require home insurance to protect their investment in case of a disaster that destroys or damages your home. While home insurance may not be required by a lender, it is recommended that every home owner insure their home and belongings to protect against a loss. Learn more about how much insurance you need.
The same holds true for flood and earthquake insurance. If you live in a flood zone or an area that is subject to a high number of earthquakes, your lender may require you to carry either an earthquake or flood insurance policy on the property.
If you own a condo, apartment or town home, the homeowners' board may require you to purchase a special policy to cover the common areas of the building. Learn more about co-op insurance.
Besides what is required, it is always a good idea to maintain adequate home insurance coverage in order to protect your own investment in your home. Even if you own your home and do not have a mortgage, your home is still susceptible to common perils. Having comprehensive home insurance coverage ensures that you will never have to worry about losing your investment if a covered disaster were to strike in your area.
Last Updated: September 16, 2010
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