Is home insurance required by law? Do you need to get home owner insurance? The answer all depends on your situation.

Car insurance --or some sort of proof of financial responsibility -- is pretty much required by state law, no matter where you live. However, home insurance is different in that it is not required by law. Your bank or mortgage lender though, will require that you have home owner insurance coverage or they won't finance your home. This is so they can protect their interests; if you're home is damaged or burns down and you default on your loan, they can still recoup their investment.

What's more, if you live in a flood-prone region your bank or mortgage company will probably require flood insurance which is sold as a separate policy.

So if you own your home free and clear, you probably won't be required to purchase home insurance. However you are still liable for lawsuits on your property, and all costs of repairs from damage to keep your home habitable. Unless you have enough assets to protect yourself from these financial risks, home owner insurance is your best bet.

Your standard policy will provide coverage for your dwelling (the home), contents (personal belongings), liability and living expenses while your home is being repaired. You can also get extra coverages for such items as jewelry and computer equipment. You can also purchase an umbrella policy which provides much higher coverages especially for liability.

If you want to save money on home insurance, the best thing to do is shop around for comparison quotes. You may also save by taking advantage of discounts such as insuring your car and home with the same company. When you shop for quotes, provide the same desired coverages to each company to get an accurate comparison. For convenience, visit an online site that allows you to enter your information once and get several quotes back.