Real Estate Tip of the Week: What’s Home Insurance?

Posted on | May 17, 2021

If you’re in the process of buying a home, you might start to wonder exactly what home insurance is and if you even need it to purchase the home.

Let’s get down to the nitty gritty of it:

Homeowners Insurance – What is it?

As with other types of coverage, you’ll pay an amount either monthly or annually in exchange for your provider helping you pay for any unexpected costs that might arise as a homeowner.

What does it cover?

When you’re a homeowner, there are plenty of things that could pop up that you can’t control – things like natural disasters, fires, accidents, crimes, flooding, etc. Without home insurance, you might have to pay an incredibly expensive bill to update your home. Home insurance offers protection that will help pay for any unexpected expenses.

Mortgages & Home Insurance

Most lenders will require you to get home insurance before they approve a loan and close the deal. This is because lenders are investing in your property – so if flooding occurs in your home, your lender will want you to have a home insurance plan to help rebuild and restore anything you lost (because it would be like they are potentially losing it).

No Mortgage?

If you are able to buy a home without a mortgage and/or help from a lender, then technically – no, you do not need to pay for homeowner’s insurance. However, many experts and employees in the field will still strongly suggest that you pay for home insurance.

It’s a way to have a backup in a worst-case scenario that you didn’t plan for – because let’s face it, there’s a lot of things that we don’t plan for.

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