Is Home Insurance a Legal Requirement?
The short and precise answer of this question is ‘No’. You are not at all under any legal obligation to purchase a home insurance policy, but it makes good sense to protect your property against any loss or damages by fire, flood, burglary, storm, and other natural disasters. Along with this, if you have taken a loan to purchase your property, then your lender like a bank or other financial institution may ask you to have insurance of your home or property. Here are a few reasons to purchase a home insurance policy:
- You Do Not Want to Take Any Chance: If you own a home or property, it is up to you to protect it with a home insurance policy or not. You can take a chance not to protect your home and you can be very lucky that nothing might ever occur to your house. However, if anything happens, the expense to rebuild or repair is all yours. You must remember that something that you consider minor damage like blown off of roof tiles or broken windows can be expensive when you get them to repair. Therefore, going without a home insurance policy can prove to be expensive.
- Understand What is Covered in Your Home Insurance Policy: If you find any home insurance policy good, it is time to understand whether it provides adequate home insurance or not. So, for the same, it is necessary to check the details of your policy very carefully and talk to your insurer regarding any doubt. Ensure that you know what is covered in your policy and what is not. Read all the small prints before finalizing any home insurance plan.
- Underinsure Your Home at Your Risk: At the time of calculation of premium, a home insurance policy provider considers many factors. One of these factors is to understand the rebuilding cost of your house. As an owner of the property, you can be tempted in declaring a substantially lower rebuilding cost for saving money. However, this small saving can cost a lot in the future, so make sure to understand this thing as underinsurance of your property may have heavy financial consequences.
- Do You Need Home Insurance, If You Are Renting Your Home? Again, it is up to you, however, it is always good to insurance the structure of your home at least even if you are renting it. As a landlord, you must protect the structure of your house. However, for its contents, the tenant is responsible.
- Get an Adequate Rebuilding Cost: It is a good idea to ask for an accurate rebuilding cost of your home when you are looking for quotes for a home insurance policy. You must keep in mind that the rebuilding cost changes with time.
- Get the Contents of Your Home Covered: When we talk about home insurance, we generally think the structure coverage. However, home insurance policies provide coverage for the contents of the house as well. Your home contains various valuable items that may range from electronic devices to your jewelry or expensive showpieces. But it is again up to you whether you want to cover them in your home insurance or not.
Summing it Up!
A home insurance policy can be considered a luxury if you do not require it and it is an absolute necessity if you have it. Therefore, should you purchase a home insurance policy or not is up to you. Let us understand it in this way, is it not easier for you to sleep peacefully at night when you have insurance for your home? Well, yes, you will.
Written By: PolicyBazaar - Updated: 05 February 2021