What Happens if I Don’t Have Home Insurance?

Many new homeowners may be surprised to discover that home insurance isn’t actually required by any state or federal law. Instead, you may be required to carry home insurance if you have a mortgage on your home. 

If you have a mortgage, the lender may require you to carry enough home insurance to cover your mortgage until it is paid off. Failing to carry enough home insurance to cover the mortgage of your home is a violation of your mortgage agreement and can lead to legal issues such as warnings and fines. 

Once your mortgage is paid off, you have the option to drop your home insurance coverage. This isn’t recommended, however. 

While you won’t be fined by the state, going without insurance means that you will have to pay for any damages to your home or personal belongings. If a fire breaks out and destroys your belongings, for example, you will have to pay for repairs and replacements all of out pocket. A home insurance policy can help you recover after an accident without taking out a loan or going into debt after a disaster. 

What if I Can’t Afford Home Insurance? 

Home insurance is calculated based on how likely you are to file a claim. The more likely you are to file a claim, the more you may pay for insurance. If you find that you are paying too much or quotes are too high for home insurance, ask your insurance agent about different ways you can save money on your coverage. Insurance providers will generally offer discounts for clients such as bundling home and auto, safety discounts for installing burglary systems, etc. You may be surprised at what discounts you can qualify for. 

There are also different payment options available for homeowners in different situations. 

How Much is Home Insurance? 

Home insurance premiums are based on various factors such as your location, value of the home, credit score, history of claims, coverage limits, deductible and more. If you live in an area with a long history of claims due to bad weather or a high crime rate, you will likely pay more for home insurance. 

A low credit score can also increase your rates. You can build credit by paying off other debts and setting up automatic drafts for your premiums so that you never accidentally miss a payment.