What are the risks of not having homeowners insurance?

Choosing not to have homeowners insurance exposes you to significant risks, particularly regarding potential legal liability for accidents and injuries that occur on your property. Homeowners insurance typically includes liability coverage, which protects you in the event that someone is injured while visiting your home or if you inadvertently cause damage to someone else's property. Without this coverage, you would be responsible for paying any medical expenses, legal fees, or damage claims out of pocket. This could lead to substantial financial strain or even bankruptcy in severe cases.

While financial protection in the event of theft is an important aspect of homeowners insurance, and full replacement coverage for assets can provide security in various circumstances, these aspects pertain more to property coverage than liability. Higher premiums on future policies may eventually be a consequence of claims made while uninsured, but the immediate risk of facing legal and financial repercussions due to accidents is a more pressing concern when considering the gap left by the absence of homeowners insurance.