Insurance FAQ's: Do I Really Need Homeowners Insurance?

Written by Tom Davenport | Jul 13, 2020 5:25:00 PM

Wondering if you really need homeowners insurance? Of course, we think ALL homeowners should have homeowners insurance, but there really there are two scenarios to consider: whether you still owe money on your mortgage or not.

Homeowners who still owe a balance on their mortgage don't even need to question their need for homeowners insurance - its a must. Lenders usually require proof of coverage because they want to make sure that their investment is protected against typical hazards.

While homeowners who are lucky enough to have their mortgage paid off aren't required to have a homeowners policy, most still usually keep their coverage because they want to protect their own biggest asset.

What Do Home Insurance Policies Cover?

Homeowners insurance covers a plethora of things and without it, you would be totally responsible for the cost of repairs or rebuilding if your home gets damaged. Besides just covering the actual structure, typical policies also contain other kinds of coverage. These include:

Liability: If somebody claims that a homeowner's negligence or purposeful action caused them to suffer from property damage or an injury, liability helps defend them or pay the claim. Some examples of covered claims include dog bites and injuries sustained from slipping on a wet floor.
Contents: Besides just protecting the home structure, policies can also cover the personal items homeowners have stored around the house. Covered items might include clothes, kitchen appliances, computers, jewelry and TV sets. If the contents of an average home had to be replaced, it would cost several thousand dollars.
Loss Of Use: Most policies also offer loss of use coverage. If the home is damaged because of a covered event, this part of the policy can help the residents pay for temporary housing while the home is rebuilt or repaired.

As a note, most homeowners insurance policies don't cover damage sustained during a flood or windstorm. If a home is located in an areas where these issues occur frequently, an agent can help homeowners find proper sources of this coverage.

Who Needs to Cover Their Home?

People who own houses, condo units and other kinds of housing usually need homeowners insurance. People who own the home that they live in usually consider that home their largest asset and it is vital (and just plain smart) to protect it.

If you own a home and use it as a rental property, you'll want to make sure that you have investment property insurance. This protects you against things like a water pipe that hasn't been checked, or unruly renters. In addition, renters should also protect themselves (and their belongings) with renters insurance.

If you are interested in estimating yourself how much homeowners insurance you need, check out this article from the Insurance Information Institute.

If this seems overwhelming to you, we are here to help! As an independent agent, we work with only the best insurance carriers to find you the exact coverage you need at the best price. Start your FREE quick home insurance quote here!

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