Can I own a home without homeowners insurance?
Well, the answer is ‘yes’! You have every right to legally own a home without a homeowners’ insurance policy. There is no city or town by-law that makes it obligatory for residents to have insurance, nor is it mandatory to buy insurance prior to buying or renting a house. Therefore you can simply enjoy your living without shelling out those extra bucks that would have gone as the premium for your insurance policy. But here arises the question, can you ‘enjoy your living’ without a homeowners’ insurance? You can, if you are used to keep awake at night or do not bother about the losses that would occur in case any unfortunate incident happens and your house and other belongings are damaged! But most of us, (in fact all of us) neither spend our nights awake nor do own a fortune to ignore loss of property that has been built with our savings of lifetime.
So if you want your peaceful sleep not to be disturbed by the thoughts of imminent disasters that might harm your house and property, buying a homeowners’ insurance is the best option available. A majority of older houses do not have any kind of insurance at all, the reason being the depreciation in the values of such houses. However, many of the new houses, including condominiums, are insured that give coverage for several perils and thus give you the assurance of recovering the loss. If you own a house or intend to buy one, buying homeowners insurance completely depends upon your will and how you perceive your loss. In case of co-op or condominiums, the walls and ceilings are often insured by the condo association itself and the condo owners need to pay the premiums. For new buyers of these homes, the association might require them to buy homeowners insurance before transferring the ownership.
Now imagine a different situation. What do you look first while making an investment, in any financial instrument or bond? The security for sure! How much secured your investment will be and how much return is assured insists you to invest in a bond aren’t it? The same goes with your lender! If you have taken a loan to buy your home, or finance it with a mortgage, your will be required to provide proof of the insurance policy to the lender. The insurance is important more to the lender (who can be a bank, or financial company or even a professional moneylender) than you because the lender would like to protect his investment in the event of damage to the property by any of the listed perils. If you cannot provide the proof of insurance and a copy of the policy documents is not furnished along with the mortgage papers, the final mortgage will not proceed further.
As it is customary to include the lender’s name in the mortgage documents as the co-owner of the property, so it is for insurance. This is again to protect the investment. In case something unfortunate happens and the property is completely damaged by any of the listed perils, the payment check will have names of both the ‘owners’ – you and your lender. The payment against the check will only be made if both of you sign. If your lender insist you for insurance, it will be better to discuss the matter together with your agent or insurance broker. If the house is located in a flood designated area, your lender will also ask you to have flood insurance. Sometimes coverage for earthquake is also required by banks or financial companies if the house is in a region that has history of earthquake occurrence. If you are a tenant, you can buy insurance covering the content of your home so that your loss is paid if your belongings are damaged by any of the listed perils.
Getting your property insured is always a better idea. These policies provide a sense of security, and give peace of mind. The insurance policy pays for all the damages to your property plus liability protection. There are different kinds of homeowner’s insurance policies available in the market. Ask for free quotes from your selected insurance companies based on your coverage requirements. All you need is to find the best policy providing wider coverage at most affordable rates. Homeowners’ insurance policies are the best means to secure your investment in home.
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