Why isn’t home insurance legally mandated?
For the most part, the only insurance most of us will ever be legally required to buy is going to be liability insurance for our cars. Everything else is generally going to be up to the individual's discretion.
You may be required to carry home insurance by your mortgage lender at first. But once your house is paid off, it's up to you if you want to risk covering repairs and liability out of your own pocket.
Liability and the law
Liability is the only type of insurance you’re required to carry as a driver. Comprehensive, collision and other policies are all up to you. That's because a liability policy will help to cover anyone injured in an accident for which you are held responsible. But the other policies are there to help you protect your own investment.
But why isn't liability insurance required by law when buying a home? If someone is injured on your property, shouldn't they be taken care of?
The answer essentially comes down to a couple of things. Liability isn't necessarily a given when it comes to your home. And your home is private property, unlike a public road.
When you get behind the wheel, you're assuming a certain degree of risk. You’re also subjecting other drivers to that risk, just by operating your car in the first place. That means that in order to claim the right to drive on public roads, you need to make sure that you can take care of anything that might happen as a result of an accident.
Levels of danger
There's relatively little danger in simply living in your home from day to day. You might drive your car on a road with hundreds of other drivers every single day, but only have company over to your house a few times a year.
Since your home is private property, it is going to be subject to fewer laws. You can't decorate public road signs however you please. But you can spray paint your name on your own garage door if you like. Your HOA might take issue with that, but state law has very little to say about it.
Ultimately, it comes down to two things:
- Owning a home is less dangerous than owning a car.
- Your home, unlike a road, is private property.