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Is Homeowners Insurance Required?

Updated September 5, 2019 . AmFam Team

If you’re planning to buy a home, you may wonder if insurance is really necessary. Learn more about whether it’s legally required and why you might want it anyway from American Family Insurance.

Homeowners insurance is something that seems ubiquitous, but is it legally required for you to have it? It depends. If you own your home and have no mortgage, no, you don’t legally need to have homeowners insurance. But if you have a mortgage, your lender likely requires that you have home insurance as part of the loan agreement. This is because of the risks associated with loaning such large amounts of money.

Whether you’re required to have it or not, home insurance is important to have to help protect you financially in the event of the unexpected. We’ve highlighted some key features of home insurance to remind you just how important it is to have coverage in place to protect your home.

Why You Need Home Insurance

While it may not be legally required to have homeowners insurance if you own your home, not having coverage can greatly affect your finances if your home suffers damage or a loss of some kind. Having insurance helps protect you financially if something happens to or in your home. For instance, things like a house fire or your dog biting someone — both resulting in expensive repair costs or legal fees — can be covered by home insurance. Having homeowners coverage is a responsible move as a home owner and provides peace of mind you’re doing what you can to protect your finances.

Homeowners Insurance Protects Your Home

Damage to your home can be expensive, and home insurance can help provide financial protection from the costs of home repairs after a covered event. The dwelling coverage on your homeowners policy provides coverage for events that damage or destroy the structure of your home, like a fire, hail or wind.

Home Insurance Protects Your Belongings

Your personal belongings are covered by a typical homeowners insurance policy under its personal property coverage. This helps protect you financially from damage to or loss of your belongings, up to certain coverage limits. A little known benefit about this coverage is that it protects your belongings even when you’re not at home. On vacation or staying at a friend’s house for a few days? Your personal property is still covered.

Home Insurance Protects You From Lawsuits

The personal liability insurance coverage on your homeowners policy covers up to a certain amount of legal fees and settlement costs if someone sues you after being injured on your property. You can also add an umbrella policy on top of your personal liability insurance to get more coverage for more substantial cases.

Home Insurance Provides Peace of Mind

With homeowners insurance, you can feel confident that if the unexpected happens you won’t have to put your dreams on hold. Home insurance gives you peace of mind that you’ll be able to recover from the unexpected when things feel hectic after damage or loss occurs to your home.

Other Home Insurance Coverages That Protect You

There are other types of home insurance coverages that you can add to your homeowners policy to provide more protection. Things like identity theft protection, equipment breakdown and service line coverage are additional coverages you can purchase to customize your homeowners insurance to fit your life.

To learn more about the specifics of homeowners insurance, connect with your American Family Insurance agent (Opens in a new tab). They can help break down the types of coverage homeowners insurance provides and walk you through purchasing a customized policy to help protect your home.

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    Having insurance is an easy decision — after all, it protects the things you work so hard for in life. Another easy decision? Bundling your insurance. From your car, home and even your family's financial well-being, you have a lot to protect. Make things simple and take control what you pay for by making the smart choice to bundle.

    How Much Do You Save By Bundling Insurance?

    At American Family Insurance, there are many ways you can save by bundling insurance, including:

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    Our most common insurance bundle, combining your home and auto coverage can save you up to 23% on both policies together.*

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    Take a look at what it means to bundle and all the benefits you’ll enjoy when you bundle your insurance with American Family Insurance.

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    What Is Umbrella Insurance?

    Umbrella coverage offers additional financial protection over and above the personal liability limits of other currently active insurance policies you have. Think of umbrella insurance as a powerful financial shield that can help protect your savings and future earnings under certain situations.

    Whether you’re found at fault for a multi-vehicle crash on the interstate, or a guest slips and falls down the icy steps outside your home — the added coverage in an umbrella policy can kick in and help cover any remaining costs should the liability limits on your underlying car or homeowners max out.

    And umbrella insurance coverage doesn’t stop there. Liability lawsuits can come in many forms and the hefty financial judgements that frequently accompany them can also drain your savings. Today, let’s take a closer look at umbrella insurance to help you understand how this coverage can help protect your financial dreams and everything you’ve worked so hard for.


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    You’ve probably heard the saying, “the early bird gets the worm.” But what does that mean for Americans who file their tax returns early?

    To most of us, it usually means quicker refunds. But early filing could also mean significantly reducing your chances of falling victim to a growing trend in identity theft. It’s called tax return identity theft and it’s affecting Americans at an alarming rate. In fact, per the Taxpayer Advocate Service (TAS), an independent organization within the IRS, 5.2 million tax returns were tagged as fraudulent in 2020. Not to fret! We’ll help you understand tax related identity theft, the signs to look out for, and what to do if it happens to you.

    What Is Tax Identity Theft?

    Tax return identity theft is the act of filing a return using a stolen identity and taking the victim’s refund.

    Equipped with three simple ingredients — a name, birthdate and Social Security number — the thief can commit tax fraud resulting in delayed or stolen refunds. And while a swiped refund may seem like a worst-case scenario, thieves may also use your stolen identity to obtain employment, an act with even greater impact.

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    Dog Liability Insurance for Homeowners

    Whether you raised him from a pup or adopted her later in life, you don’t just view your dog as a pet: you consider them a member of your family. According to a survey by the American Pet Products Association, almost 90 million dogs are owned as pets in the United States — and while your dog offers a whole lot of love and laughter, they can also be a potential liability. Luckily, we offer dog-friendly homeowners insurance.

    At American Family Insurance, we love pets and understand that they’re part of your household. That’s why we want to make sure you understand exactly how your dog affects your homeowners insurance and ensure that you have the proper protection in place not only for your home, but for your dog, too.

    Is My Dog Covered by My Homeowners Insurance?

    Whether or not your dog is covered by your homeowners insurance depends on who you have as an insurance provider. With American Family, your home, renters, manufactured home or condo policy will provide dog liability coverage — a form of financial protection against liability claims, including lawsuits for accidental bodily injury or damage to someone’s property. This includes paying for medical expenses if your dog injures someone or helping cover costs if your dog destroys someone else’s property.

    It's important to note that your homeowners insurance won’t cover damage done by your pets to your own home, such as if your dog chews a hole in your sofa or scratches your doors or woodwork. And, keep in mind, your homeowners policy doesn’t cover injuries to you and the residents of your household. It only pays for injuries to others.

    Need insurance for your dog? Consider pet insurance from an American Family Insurance agent to help you care for your pet through all stages of its life.

    We also offer a special add-on pet coverage that provides up to $1,000 for veterinarian services, final expenses (like burial or disposal fees) or the cost to replace your dog if death occurs. This coverage is applicable after a covered property loss.

    Does Homeowners Insurance Cover Dog Bites?

    Whether you’re walking your dog through the park or at home playing in the yard, the liability portion of your homeowners insurance policy will help cover you if your dog bites someone or if they bite another dog.

    Remember, a dog can bite out of fear, to protect their territory, to correct another dog’s behavior or for several other reasons. Because dog bites occur for a variety of reasons, keep these tips in mind to prevent your favorite family pet from biting:

    • Keep your dog on a leash.
    • Don’t leave your dog unattended with strangers or children.
    • Make sure people respect your dog’s space.
    • Spay or neuter your dog — this helps reduce their desire to roam and fight with other dogs. According to the National Canine Research Foundation, neutered dogs are three times less likely to bite.
    • Socialize your dog. Introduce your dog to many people and situations so it isn’t nervous or frightened under normal social circumstances.
    • Enroll your pooch in a dog training class. Not only does it help your pet learn better behaviors, but it teaches you to be a good pet owner, too.

    And it’s not just bites that cause liability incidents — if your overly excited pup jumps on someone, knocks them over and breaks their wrist, you’ll be able to cover their medical expenses with the help of your liability coverage.

    How Much Coverage Do I Need for My Dog?

    Your homeowners policy has a liability “limit” that, in the event of a loss, will cover up to a certain dollar amount. Your liability limit is the amount available to cover anything from a dog bite to your neighbor slipping and falling on your icy steps. To understand your potential pet liability cost and the amount of coverage you need, think about the amount it may cost for medical expenses and if someone were to sue you. Sometimes this number is well into the six figures! For instance, if your liability amount is $300,000 but your dog bit someone and medical expenses and legal fees came to $500,000, you’ll be responsible to pay the remaining $200,000.

    If you want to ensure you have adequate coverage in place, an umbrella policy is an added layer of protection which provides a much higher level of coverage to financially protect you from unexpected incidents with your dog.

    Homeowners Insurance Dog Breed Restrictions

    Unfortunately, not all dogs will meet the criteria to be included under a policy. While most dog breeds won’t impact your eligibility for homeowners coverage, there are some breeds that require additional considerations, such as whether your yard is fully and securely fenced. You must also provide certain documentation to be considered eligible, like evidence of up-to-date annual vaccines and proof that your dog has been spayed or neutered.

    It’s also important to note that, depending on your dog’s prior history (e.g. history of biting, if they were trained or used as an attack or guard dog), they might be subject to a dangerous dog liability limit that reduces their liability coverage for losses to $25,000.

    Your American Family Insurance agent can help you determine the specific requirements for insurability based on the breed of your dog.

    At American Family, we want to help protect all the things that matter most to you. Connect with your agent and gain peace of mind that you have the right coverage in place for your four-legged friend.

    This article is for informational purposes only and includes information widely available through different sources.