If you don't have homeowners insurance and your home is damaged, your possessions are damaged or stolen, or someone is hurt on your property, you will likely be fully liable for covering all of the damage.
Worst-case scenarios don’t happen often, but they do happen. That’s why it is important to know what happens if for some reason you aren't protected by homeowners insurance and disaster strikes.
Here are some of the scenarios that can play out if there's a disaster and you don't have coverage, presented by Jerry
. You have a greater risk of defaulting on mortgage
If you've financed your home, you are likely required to carry homeowners insurance. This is because a lender helped you pay for the home, which means they partially own the home until you've fully paid them back. They want the home to be insured so that they can be reimbursed if it's damaged or destroyed.
If your coverage has fallen through the cracks and you are without insurance when a worst-case disaster strikes, the debt you may incur in repairs can make it difficult to also make your house payment.
This means you are more likely to default on your mortgage
and lose your home. Your mortgage lender may also place you in default status, even if your home remains safe and sound. If you don't harry homeowners insurance, you've violated the terms of your mortgage agreement to carry homeowners insurance for the life of your loan. Such action also can result in the loss of your home.
You could lose your home to natural disaster
If a tornado rips your home apart or wildfires burn it to the ground while you don't have homeowners insurance, you are left fully responsible for the damage.
This leaves you owning the ground beneath your home but no home to live in. Without insurance, you must pay for all repairs or rebuilding out of pocket regardless of any steps you took to protect your home from natural disaster
. You could lose your possessions
Whether by natural disaster or burglary, there is no remuneration for personal possessions if a loss occurs and a homeowner had no homeowners insurance. Granted, nothing can replace an heirloom like your grandmother’s wedding ring, but you won’t get any financial payout to soften the blow.
You could also find yourself replacing all of your possessions in the event of a disastrous loss. Replacing all the little things you own and need adds up quickly. Think of how much you spent amassing furniture, appliances, electronics, kitchenware, hygiene items ... the list goes on and on. Without property coverage, all those possessions are gone.
You can get sued if you don't have house insurance
If someone gets hurt on your property, a tree falls on a visitor’s car, or your dog bites the mailman, you become liable for property damage and bodily injury.
We live in a litigious society, so don’t assume your friend or neighbor won’t seek legal action. If the loss or injuries are great, everything you own (your house, investments, personal possessions) become at risk. With even standard homeowner’s insurance, you get a degree of protection against such lawsuits through liability coverage.
Having no homeowner’s insurance and then being found responsible for a major liability might be the worst-case scenario of all. Anything of value amassed throughout a lifetime could be seized to pay the debt, and your credit takes a huge blow, too.
You might have a hard time selling your house
If you're thinking about selling your house and have allowed the homeowners insurance to lapse, this can actually impact your home’s desirability to potential buyers.
During the closing process, there is a risk that significant damage could occur to the home, and the party responsible may fall into a gray area. Also, if a potential buyer realizes a homeowner did not carry insurance as should be done, other questions of upkeep and transparency arise that make the house less desirable.
The risks of not having homeowners insurance is just too great to ignore. Make sure you have homeowners insurance today.
And if you also need auto insurance and you want to bundle
, give Jerry
a try. If you’re looking for a new insurance company, Jerry can provide you with competitive quotes in under a minute. Swapping is just as effortless. Jerry takes care of all the paperwork and phone calls and can even assist you in canceling your old policy.
On top of that, Jerry will search for carriers that bundle car and home insurance, so you can bundle your policies and receive potential discounts.
FAQs
Can you own a house without insurance?
Technically, yes, you can own a house without insurance. If you fully own the home, there's no law saying you need to keep it insured.
However, it's not advised that you let your homeowners insurance lapse. If you're caught without homeowners insurance and disaster strikes, you could be liable for all of the damages to your home, damages to other people, and lost or damaged possessions.
Are you required to have homeowners insurance?
Most people will be required to have homeowners insurance when they first buy their home. Unless you bought the house alright, you probably have a mortgage, and that means lenders paid for the house. Lenders are allowed to require you to buy homeowners insurance to make sure the property they invested in is insured.
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