Shopping for your first home can be an exciting yet tricky process. You may have questions about what you are required to have. Let’s go over the basics of home insurance.
What Does Home Insurance Cover?
Home insurance is meant to protect you and your property in the case of an unexpected loss. A standard home insurance policy typically covers dwelling, personal belongings, other structures, loss of use, medical payments and personal liability protection. Home insurance has covered losses or “perils” such as fire, wind, hail, vandalism or theft.
Am I Required to Have Home Insurance?
Legally you are not required to have home insurance if you own your home outright. However, if you have a mortgage, lenders will require you to have home insurance as a part of the contract. In many cases, a mortgage lender will require that you insure your home up to the rebuilding value.
Can My Homeowners Association Require Home Insurance?
If the rules set by your homeowners association (HOA) require you to carry home insurance, then you will need to have it. HOA rules or bylaws can vary depending on where you live.
Do I Need Home Insurance if I Pay Off My Mortgage?
If you have paid off your home, then you are no longer required to have home insurance by your lender. However, home insurance is still a smart way to protect your investment. Home insurance not only protects the structure, but it also covers your belongings and offers you liability coverage in the case of a lawsuit. Accidents or disasters can happen at any time. You have spent years investing in your home and if a loss occurs, you could end up paying hefty out of pocket costs or worse, end up losing your home all together.
When Should I Buy Home Insurance?
It is a good idea to begin shopping for home insurance around the same time you are signing the contract on your home. This is because it can take up to a month from the time you sign to the day you close on your home. This will give you plenty of time to compare quotes and shop around.
Let’s talk
We know that buying your first home can be confusing. Contact one of our experienced Avery Hall agents today at 410-742-5111 for our Salisbury office, 302-684-3413 for our Milton office, and 302-536-9470 for our Seaford office.