Unlike car insurance, homeowners insurance is not required by law. However, there are two main reasons why you must have homeowners insurance.
First, you need it to protect your assets. This means protecting the structure of your home, as well as your personal belongings. You are also liable for any danger or damage, that can occur to anyone inside your home, so protecting yourself from liability is essential.
Second, mortgage lenders require homeowners to purchase a homeowners insurance policy. If you don’t have a homeowners insurance policy, your mortgage lender will likely attach a policy and charge you a premium per month until you purchase your own policy. It is rare for a mortgage lender to lend you money for a home without a homeowners insurance policy. Force placed policies by your mortgage company protects only their interest in the property for the payoff value of the loan. Your interests including liability and contents coverage are generally not included in these policies.