Is it mandatory to have a home insurance policy?
Unlike the situation with car insurance, you aren't legally required to won a home insurance policy to live in your house. But, in case you've used a mortgage to finance the purchase of your house the lender will most likely require you to purchase a home insurance policy. The lenders thus protect their investments from the impact of damage your home may face during natural disasters or other unforeseen events.
In case you purchase a home in an area with a high risk of flood or earthquake, the lender is likely to require the respectful type of coverage to be included in your home insurance policy. When you buy a co-op or condo, you are most likely to be required to purchase a home insurance policy by the board.
When you have paid off your mortgage you are no longer legally required to have a home insurance plan. But it is recommended that you don't cancel your policy, because not having coverage in an exceptional case will cost you too much.
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