Do I Have to Keep Home Insurance?

When it comes to home insurance knowing the basics can help you determine if you need a policy or if you can get by without. For those that live in the Cullman, AL area, the agents with Insurance Solutions Inc. can help you determine if you need coverage and what type of coverage you need.

The best way to determine if you legally have to hold home insurance is to determine if you have a mortgage or loan out against the value of your home. If you are paying a mortgage or you have a lien against your home, you are legally required by federal law to hold home insurance. The reason for this is that if the home is destroyed and you have no policy, the burden of paying back the loan to the lender falls to the borrower and this is not a certainty that the lender is going to be able to pay the amount back.

If there is a home insurance policy in place, the lender can take the money from the insurance claim to recoup the cost of the loan or the borrower can rebuild the home and continue to pay the loan. For those that own their home outright, it is not a legal requirement that you have to have a policy. You can of course refuse to hold a policy if you own your home but it is a risky thing to do.

It is always beneficial to have a home policy, even if you own your home because otherwise, the burden of paying to rebuild falls entirely on the individual whose home was just destroyed. This can get into the hundreds of thousands to pay for both clean up and rebuilding so having a policy is always going to be beneficial. The agents with Insurance Solutions Inc. in the Cullman, AL area can help you today.