Like most states, Missouri law does not require homeowners to carry home insurance. However, if you have a mortgage on your home, your lender will require you to purchase an insurance policy to protect their interest in the home. The amount of coverage required by the lender must be enough to pay off the outstanding balance on the mortgage in the event the house is destroyed and deemed a total loss.
The mortgage company does not dictate which insurance company you choose to insure your home. If, however, you fail to get adequate coverage, they will purchase a policy and charge you for the premiums that are tied to the policy. In most cases, it is financially smarter to buy your own insurance policy rather than relying on the mortgage holder to purchase a policy for you.
Home insurance in Missouri covers physical damage to your home that is a result of any covered perils listed in the policy and it also contains a liability component that will protect you in the event someone is injured while in your house or on your property. There are no standard amounts of insurance to buy. Each situation is different. Insurance should cover the cost of replacing your structure as well as the contents within your home. Liability insurance should be of a sufficient amount to pay the medical bills of someone injured on your property and also protect your other assets you might have that could be lost in an expensive lawsuit.
The rates that you will pay are based on a number of different factors. At the top of the list is the market value of your home. The contents of your home can be insured for their actual cash value (depreciated value) or for their replacement cost. While you will pay a little more in your premiums for replacement value coverage, it is much better coverage and will allow you to buy a brand new mattress, appliances or any other older items at today’s prices.
Other factors that go into determining your insurance premium will include the age of your home, the type of construction of your home and roof, the distance your home is from a fire hydrant or fire station and the size of your deductible. You may qualify for certain discounts such as if you insure both your home and vehicles with the same insurance company or you have certain safety features like an alarm system or sprinkler system installed in your home.
Finally, even if you have paid off your mortgage and own the house free-and-clear, it is still a good idea to have homeowner’s insurance. Your home can be worth hundreds of thousands of dollars and you do not want to risk losing it should a fire or other disaster strike. Shop around with several different insurance companies to find the lowest rates and the best coverage.
