Is it mandatory that you carry homeowners insurance?

Question

My wife and I have two kids, and we have been forced to live on a tighter budget for the past 6 months. Allstate just raised our homeowners insurance by $50/month and that is more than we can afford right now. Is there a law that require we have homeowners insurance? Does our mortgage company require it?

Answer 1

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Answer 2

There is no law that requires it, but your lender will.  If you let the insurance lapse, they will purchase insurance for you at an outrageous rate and send you the bill, which you will be expected to pay.

Answer 3

That $50 sure will seem cheap if you have a fire.

Get an extra job.  You can earn $100 a WEEK or more.

Yes, your mortgage requires it.  They know they will never get another dime for you if an uninsured house burns down.

Answer 4

Is it mandatory to have car insurance?

Answer 5

If you have a mortgage your lender will require that you have an up to date insurance policy. If something happen such as a fire and you didn't have insurance, you would still be responsible for a house payment on a house you may no longer be able to live in. Find other ways to cut corners and keep your insurance.

Answer 6

If you have mortgage, you must have home owner's insurance.

You got a loan based on the premise that your lender could take your house if you don't pay. If something happens to your house, your lender's collateral just went down in value or disappeared. They need assurance that their investment is sound.

Answer 7

Yes it is. Your bank has to protect its interest/property. Why don't you call the insurance co. and find out why the cost went up $50.  Raise your deductible, ask them what can we do to get the cost of the insurance down.

Answer 8

mortgage company requires it

Answer 9

Yes...as noted above, if you have a mortgage, you must keep the property insured.  You might shop around to see if you can find a better insurance rate.  Or, as suggested above, increase your deductible.

Answer 10

There isn't a law, but your mortgage 100% requires it.  read your mortgage.  You DID promise to keep insurance on the property while the lender had an interest.

And if you drop it, they have the RIGHT to buy insurance for you.  They have no obligation to save you money.  This lender's insurance WILL cost you about 3-4 times what you are paying.

Call your insurance company and see if there are ways to lower the payment.  Increase your deductable to $1,000 is one way.  Combo the car and home owners.

Answer 11

If you own your house free and clear you do not have to have insurance.  Your mortgage has a clause explaining to you that , if the house burns down, they don't have anything to put a mortgage on.  So you must protect them by keeping insurance.  If they don't receive proof that you have insurance, they will hire an insurance company for you and add it to your mortgage.