Why is homeowners insurance necessary?
I'm thinking of skipping homeowners insurance for the house I'm planning to buy, but my mom is begging me to buy a policy. Why is insurance necessary?
A home is typically the most expensive purchase in a person’s life and a big investment. Homeowners insurance helps to protect that investment. For example, if your home burns down, your insurance will help you to rebuild it, replace your personal items, and pay for a hotel stay while your home is being rebuilt. If you do not have insurance, all of those expenses would be out of pocket.
Home insurance also covers your liability if you damage someone else’s property. For example, let’s say a tree in your yard topples over and falls into your neighbor’s home. Your homeowners policy will cover the damage to your neighbor’s house. Without home insurance, you would have to pay for the damage, which could be quite significant.
Furthermore, if you have a mortgage, the bank requires that you have a homeowners policy in place on the day you close or finalize your home purchase. Once you pay off your home, homeowners insurance is no longer required, but it should definitely be kept for your protection.
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Read advice from car experts at Jerry
Browse by topics
What others are asking
Do auto insurance companies reissue checks in North Carolina?
"My dad was in an accident and received a settlement for his medical bills. The accident happened three years ago and I just found the check for him now. I called the insurance company to see if they'd reissue the check and they said the statute of limitations was three years, so they wouldn't be able to. WIll my dad be responsible for the medical bills now?"
May 20, 2021
If I'm buying a car from a private seller and I need a loan, how does the money get to the seller?
I want to buy a car from a private individual, but I'll need a loan to get it. How will the seller get their cash?
Mar 12, 2021
Is car insurance cheaper in New Jersey if you buy a new policy with the same company rather than renew the policy?
My NJ car insurance policy is up for renewal. My insurer quoted me a six-month rate of $1,500. Out of curiosity, I went on their site and applied for a new policy. It was only $1,200. Is it always cheaper to purchase a new policy rather than renew your old policy?
Apr 22, 2021