Determining if Homeowner’s Insurance is Required

Buying a home is one of the happiest days of your life. Your home is the place where you will build a family and make countless memories. It costs a lot of money to buy a home. There are two basic options for buying a home: pay with cash or pay with a loan. Paying in cash often means that you need hundreds of thousands of dollars in cash. It is uncommon for any person to have that type of cash available at any given moment. Mortgages are the way most homeowners purchase their homes.

A mortgage means that you will have a monthly mortgage payment that you must make every month. It is part of the agreement that you make with your loan servicer. These payments typically take up a significant portion of your monthly income. Another term of every mortgage is that condition that you must always have home insurance coverage. This is because it protects your home which was used as collateral for the loan. It also ensures that the loan provider gets paid their money in the event of a disaster. So, if you have a mortgage, you must have homeowner’s insurance. However, if you have paid cash for your house, there is no requirement to have homeowner’s insurance.