Don’t Have Homeowner’s Insurance? 5 Risks You Must Know
While Massachusetts residents must carry car insurance, homeowner’s insurance isn’t required. Still, that doesn’t mean you should skip the coverage. Failing to carry insurance on your home provides a variety of risks and expenses. Your home is likely one of the most expensive purchases you’ll make in your lifetime. Failing to obtain homeowner’s insurance means you could lose everything in the event of a disaster.
What Is Homeowner’s Insurance?
Typically, when you purchase a home, you get a home insurance policy to protect your investment. Homeowner’s insurance is a policy that provides coverage for your house and your possessions inside your home. It also provides liability coverage that protects you and the members of your home for damages and injuries. Homeowner’s insurance often provides coverage for loss-of-use and other structures on the property. Add additional coverage to your homeowner’s insurance policy to cover expensive possessions, earthquake coverage, and flood damage.
What Happens When You Don’t Have Homeowner’s Insurance?
While state law doesn’t require every homeowner in Massachusetts to have homeowner’s insurance, there are some situations that require you to purchase a policy. For instance, if you buy a new home that you’re making payments on, the mortgage agreement will likely include a homeowner’s insurance requirement. This way, in the event of a disaster, your mortgage lender will still recoup their money.
Homeowner’s insurance provides a variety of benefits even when paid. Here are some risks you may face if you don’t get homeowner’s insurance.
You Pay Out-of-Pocket for Damages to Your Home
Homeowner’s insurance typically provides coverage for the cost of replacement for damages to your house due to covered perils. While avoiding those monthly premiums may sound like a financial boost, the costs of repairing the damage can be much more expensive than keeping your homeowner’s policy updated.
Hail, wind, or vandalism damage without coverage requires you to pay out-of-pocket. Even worse, in the event of complete destruction by covered perils, you’ll be responsible for complete replacement. Most homeowner’s simply don’t have the funds to pay for catastrophic losses.
Your Property Has No Protection
Your home insurance policy covers more than the structure of your house. It covers any lost or damaged household possessions listed in your policy. When values are stolen without homeowner’s insurance, you must replace them out-of-pocket. Additionally, destroyed in a covered event, you’ll have even more costs to cover alone. In the event of a catastrophic loss, you may even face complete loss of your home and all of your possessions.
You Have No Liability Protection
Did you know that if a visitor is injured on your property, you’re responsible? Even worse, if a trespasser gets hurt while on your property, you’re still legally responsible. Without homeowner’s insurance, there are many expenses. A simple trip-and-fall injury leaves you paying for hospital bills, the time an individual misses work, and even legal defense. These expenses quickly add up and leave you facing a mountain of debt that follows you for years to come.
Your Mortgage Defaults
When paying a mortgage, purchase a homeowner’s insurance policy. If you fail to pay your monthly premium, your coverage lapses and your mortgage lender will likely be contacted. When you don’t have homeowner’s insurance that equals the amount you owe on your home, you’re in violation of your mortgage contract. Your mortgage lender might find a new insurance provider for you that could have even higher premiums or not provide the coverage you need for your possessions. Depending on the terms of your policy, you may be in default and face immediate foreclosure.
You Likely Won’t Be Able to Secure Financing
First, get approval for a mortgage. When pre-approved, your lender requires a variety of important documents, including proof of insurance. Carry enough homeowner’s insurance to replace the value of the home in the event of a complete loss. If you live in a high-risk area for certain risks (like floods or earthquakes), purchase additional coverage to protect against risks not covered on a typical homeowner’s insurance policy.
Lenders require you to purchase homeowners insurance to protect their investment. This means the mortgage agreement outlines the required minimum insurance. You can choose to add additional coverage to protect your assets as well,
Finding the Homeowner’s Insurance You Need
There are a variety of costs that go along with homeownership and it’s common to seek ways to save money. Failing to purchase homeowner’s insurance, or letting your policy lapse, might save you a little money right now. Still, the long-term expenses related to potential damages that may occur are often more than homeowners can afford. Saving money on home insurance could lead to losing your home and your possessions. Further, it could lead to legal expenses you can’t afford.
If you live in the Greater Boston area of Massachusetts and are considering buying a home, or you already own a home, it’s vital to understand the importance of homeowner’s insurance. LoPriore Insurance is an independent insurance agency dedicated to helping customers find insurance that fits your lifestyle. Get in touch today to learn more about available homeowner’s insurance policies, find answers to your questions, or get a quick quote on the policy you need. Our agents are standing by to help you get the insurance policy that will provide you protection and peace of mind.