Are Homeowners Required to Have Homeowners’ Insurance?

According to the Insurance Information Institute, homeowners’ insurance is not legally required.

However, “Most of the time, a mortgage company will require a buyer to purchase homeowners insurance,” Robert Buckel, vice president and product manager for Erie Insurance, explains. “The mortgage lender is also listed on the homeowners policy so their interests are protected in the event of a claim.”

Depending on the geographic risks surrounding your home, your state may federally require a particular type of insurance for your home. For example, if you live in a flood zone, you may be required to purchase flood insurance, and so on.

Even if your home is paid off, you still have an important financial incentive to buy homeowners coverage. Don’t forget that you have an investment to protect.

Not surprisingly, surveys commissioned by the Insurance Information Institute have shown that between 94 and 96 percent of American homeowners have insurance.

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