What Happens When You Do Not Have Home Insurance?
Most homeowners realize that having homeowner's insurance is a necessity, as it protects the biggest investment they may own – their home. Without home insurance, you could experience major losses and problems if anything happens to your home. Here are several things you should know if you currently do not have home insurance on your house.
Your lender will buy it for you
If you currently owe money on your house in the form of a mortgage, you should carefully read through your loan contract to see what it says about having home insurance. When reading through it, you will likely discover that you agreed to keep home insurance on the house while you have an outstanding loan to pay. If you fail to keep up with this part of the agreement, your lender will take matters into their own hands by purchasing a policy. The policy purchased will protect them if anything were to occur to your home that left it damaged or unlivable.
You would not only lose your house, but you would owe the balance of the loan
Even if your lender purchases a policy for you, it really will not protect you. This means that if you do not buy your own policy, you stand to lose a lot if something happens to your home. Not only would you lose your house if something happened, such as a fire, but you would still owe the money to the lender for your loan. Imagine that you owed $200,000 on your house, and it burned to the ground. You would lose your house and everything in it, plus you would owe $200,000. This would not be a good situation to be in, yet you take this risk if you choose to not buy home insurance.
You could lose everything if someone sues you
Another thing to understand is that home insurance offers liability coverage, which protects against lawsuits. If a person tripped at your home and broke his or her back, that person could sue you. The good news is that if you have home insurance, your policy would cover the damages. If you do not have home insurance, you would be responsible to pay the damages out of your pocket.
If you currently do not have homeowner's insurance on your house, you should not delay in calling an insurance agency. Having this type of coverage is vital, and you can purchase a policy online, in person, or over the phone. For more information about homeowner's insurance policies, contact a company such as ALTRE Insurance Agency Inc.
