Do I Really Need Homeowners Insurance

Do I Really Need Homeowners Insurance

There are a lot of costs associated with owning a home besides your mortgage payment. You have utilities, maintenance and repair costs, property taxes, homeowner’s insurance, and possibly an HOA (homeowners association) fee and private mortgage insurance. It’s not uncommon to look for ways to reduce your costs. For example, you might ask yourself, “Do I really need homeowners insurance?

We have covered that question with

  • Title Insurance and
  • Mortgage Insurance

Do I Really Need Homeowners Insurance?

“When you have a mortgage, you have to have home insurance,” says Gregory Brown, a top-selling agent based in Fort Wayne, Indiana, who’s sold 459 single-family homes. “If you’re buying a home with cash, they don’t require it — but it would be pretty crazy not to have insurance.”

According to Heritage Insurance, “In states that experience heavy storm activity, homeowners generally pay around 2% of their income in insurance premiums. Although that is a significant expense for some, most Americans choose to pay it rather than go without insurance—95% of homes in the U.S. are insured.  About 5% of insured homes will have a claim this year, and wind or hail damage will be the most likely cause.

Why You Need Homeowners Insurance (HI)

1. Without HI, your mortgage lender could send your loan into default.

You know you’ll most likely be required to have homeowners insurance at closing. If you don’t have it throughout the life of your loan —you’ll violate the terms of the loan. Your mortgage lender could send your loan into default

2. You might have difficulty selling your house when the time comes.

If you don’t have a mortgage, you can sell your house without an insurance policy. Still, it’ll make your property less attractive to potential buyers and expose you to a major risk of total or significant loss.

3. A natural disaster strikes, and you can’t afford to fix the damage

4. You lose expensive yet replaceable items to burglary

5. You lose priceless possessions to burglary.

Your home insurance policy may or may not cover these collections under its regular property insurance. However, you can purchase additional coverage to protect the value of these items if stolen.

6. Someone gets hurt on your property and sues you.

Maybe you’ve paid off your mortgage and have canceled your insurance policy. If something terrible happens to someone else on your property, the injured party may decide to sue you for everything you’re worth (and then some). And that includes your house. With homeowners insurance, you’ll have basic liability coverage, which should protect you from litigation fees and medical bills

What Kinds of Home Insurance Are There?

  • HO-1: The most basic and limited type of policy for single-family homes, HO-1s are all but nonexistent nowadays
  • HO-2: A more commonly used policy and a slight upgrade from the HO-1
  • HO-3: The most common type of homeowners insurance policy with broader coverage than the HO-2
  • HO-4: A policy type that is specifically for renters
  • HO-5: The most comprehensive form of homeowners insurance and the second most common policy type for single-family dwellings
  • HO-6: A type of coverage designed for condo owners
  • HO-7: The type of policy you get if you own a mobile or manufactured home
  • HO-8: A particular type of homeowners insurance for older homes that don’t meet insurer standards for other policy forms

By now, you’ve most likely concluded that canceling your homeowner’s insurance doesn’t belong on your to-do list after closing. You may not technically have to have homeowners insurance in all cases. But experts agree it’s a good idea to protect yourself from a possible catastrophe. And if one never strikes, your policy buys you valuable — even priceless — peace of mind.

FREE information on How to sell your house fast

Styl Properties, Inc. is here to help homeowners out of any distressed situation.  

As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what!  There are no fees, upfront costs, commissions, or anything else.  Instead, we offer the simple truth about your home and how we can help you sell it fast.

Give us a ring. We would love to help you understand the process and to answer all of your questions. You can reach us at 402 999.0577

Photo by Cassiano Psomas on Unsplash

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