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Is Greensboro Homeowner’s Insurance Mandatory?

Is-Greensboros-home-insurance-mandatory

Unlike auto insurance, which has a legal requirement of every vehicle driver in Greensboro and elsewhere in North Carolina, Greensboro homeowner’s insurance is not legally mandatory for home owners.

Still, homeowner’s insurance is one of the most popular types of personal insurance sold, and Greensboro homeowner’s insurance is no exception. The reason is simple. Homeowner’s insurance provides protection for what is most people’s most valuable asset – their home. It also provides protection against financial loss stemming from a liability claim filed by someone suffering a loss at your home or on your property determined to be due to your negligence.

When Greensboro Homeowner’s Insurance is Required

While not required by law, homeowner’s insurance is likely required of anyone purchasing their home through a lending institution. If you’re paying off a mortgage on your home, it’s only reasonable that your mortgage holder be protected against financial loss if your home were to be damaged or destroyed by something like a fire, storm, lightning strike, explosion, etc.

To satisfy this need for financial protection, your mortgage lender will likely require you to obtain homeowner’s insurance as a condition of granting your home loan. From your point of view, the amount of coverage you carry should be enough to totally rebuild your home at today’s costs in the event that it’s razed to the ground. From your mortgage lender’s point of view, you need only carry enough coverage to pay off any remaining amount left on your home loan.

Often, a lender will only require that your home be insured to 80% of its value, depending on the down payment you make when buying the home. Be advised that their only financial interest is in protecting the amount of your outstanding loan. You, on the other hand, should be concerned with the amount needed to rebuild you home at today’s prices if it was to be totally destroyed by something like an all-consuming house fire.

Who Doesn’t Need Homeowner’s Insurance?

If you own your home outright, with no outstanding loan, getting a homeowner’s insurance policy is totally a judgment call on your part, but consider this. If you feel able to absorb a total loss of the home you choose not to insure, including loss of all your personal possessions kept in that house and you are willing to forego the liability protection a homeowner’s policy offers, you’re basically self-insuring and should be fine.