{"id":25762,"date":"2021-08-16T13:24:00","date_gmt":"2021-08-16T20:24:00","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=25762"},"modified":"2021-08-16T13:24:00","modified_gmt":"2021-08-16T20:24:00","slug":"buyer-do-you-have-to-have-home-insurance","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-do-you-have-to-have-home-insurance\/","title":{"rendered":"Do You Have to Have Home Insurance? What Homebuyers Need to Know"},"content":{"rendered":"

Once you become a homeowner, your home will most likely\u00a0 become your biggest financial asset. As the cornerstone of your financial wealth<\/a>, protecting it from losses \u2014 both physical damage and loss of its monetary value \u2014 is an important part of your duty as a homeowner. With expenses like HOA fees, property taxes, repairs, and upkeep, you might be curious \u2026 do you have<\/i> to have home insurance?<\/p>\n

\u201cMost people think of home insurance as something that protects from catastrophic events,\u201d says Ed Kaminsky<\/a>, an agent based in LA County, California, with more than 30 years of experience.<\/p>\n

Fire is the disaster that most homeowners mention when they think about home insurance. \u201cIf there\u2019s a fire, and your house burns down, the homeowners insurance will cover it.\u201d<\/p>\n

In reality, homeowners insurance is a policy designed to cover a variety of things: the building itself, the personal property within it, other personal property you own, expenses stemming from accidents happening within the property, and even liability for your pets.<\/p>\n

\"A<\/a>
Source: (Andrew Neel \/ Unsplash)<\/figcaption><\/figure>\n

Do you have to have home insurance?<\/h2>\n

\u201cYou should always have home insurance,\u201d Kaminsky comments. \u201cBut you are only required<\/i> to have it if your property has a mortgage<\/a>.\u201d<\/p>\n

If you own your home outright, or you purchased your home with cash<\/a>, you won\u2019t be required to have it, but \u201cI can honestly count on one hand how many people I have met in my career that don\u2019t have insurance. It\u2019s pretty rare to not have it.\u201d<\/p>\n

If you do have a mortgage loan on your home, and your homeowners policy was cancelled for whatever reason, you are likely legally in violation of the terms of your loan<\/a>. This is why it\u2019s so important to check a few times a year and make sure your insurance policy is up-to-date.<\/p>\n

How does insurance work?<\/h2>\n

In most typical policies, you will see coverage for the following items.<\/p>\n

The dwelling<\/a><\/h3>\n

This is insurance-speak for the building itself. It includes both the main home and any detached buildings, such as detached garages or sheds. If your house is damaged or destroyed, your homeowners insurance will aim to rebuild or replace your home.<\/p>\n

Your possessions<\/h3>\n

For insurance purposes, this includes both your possessions inside the home as well as things you might carry on your person when you leave your home. Your belongings are protected in case of loss and theft<\/a>. You can expect to receive somewhere between 50% and 70% of your dwelling coverage for a possession claim<\/a>, depending on what\u2019s lost or stolen.<\/p>\n

Liability<\/h3>\n

If there\u2019s some kind of accident in your home, like a dog bite<\/a> or a fall, your homeowners insurance policy will cover medical and legal expenses stemming from the incident. This typically translates to between $100,000 and $500,000 for legal expenses, and between $1,000 and $5,000 for medical payments.<\/p>\n

Additional living expenses<\/h3>\n

If you have to leave your home while it is being repaired due to loss or damage, you will receive up to 20% of your dwelling\u2019s coverage to help pay for those expenses..<\/p>\n

When an insurable event<\/a> covered in the policy happens, you file a claim with your insurance company, pay a deductible amount established in the insurance contract, and the insurance will cover the rest of the repairs, up to the coverage limit.<\/p>\n

In many instances, the claims process is when your insurance agent<\/a> can help put you in touch with the right departments within the insurance company, make recommendations, and help guide you through the process.<\/p>\n

\"A<\/a>
Source: (Jen Theodore \/ Unsplash)<\/figcaption><\/figure>\n

Purchasing the right insurance coverage for your needs is key<\/h2>\n

\u201cYou have to watch out and ask lots of questions of your insurance agent,\u201d Kaminsky warns.<\/p>\n

\u201cIt\u2019s easy to make the assumption that all catastrophes are covered equally, or that your insurance coverage would cover your home to be rebuilt today if it were to be a total loss.\u201d<\/p><\/blockquote>\n

The 16 named perils<\/a> are specific kinds of damage or losses listed in your policy, according to Lemonade, that cause your coverage to kick in. These will automatically be covered in most policies:<\/p>\n