What is homeowners insurance, and should you get it?

The steady rising cost of homeowners insurance can make some homeowners wonder if it’s still worth the investment, but according to experts, the short answer is yes.

Simply put, this insurance protects you from paying for costly damage in the event of a disaster, accident or theft. The exact amount of protection depends on your policy, which is why it’s important to shop around and compare prices. In most states, consumers have dozens of choices of both regional and national insurers, but there are some states like Florida and Louisiana where it’s become increasingly challenging to find a policy that works for you.

By law, homeowners aren’t required to buy insurance, but many banks require it to obtain loans. The cost is often rolled into an escrow account and included with your monthly mortgage and tax payments, but insurance can also be paid annually or even monthly on its own.

Most homeowners have homeowners insurance — only about 7% of them don’t, according to the most recent data from the Insurance Information Institute (III), a nonprofit organization that provides research and education to help consumers gain a better understanding of insurance.

“Typically, people without home insurance don’t have a mortgage because of a cash sale or because they’ve already paid off their mortgage,” says III spokesperson Mark Friedlander. “They’ve determined they’re willing to take the risk that they can recover from a catastrophe without insurance. But catastrophes can devastate families financially and going without insurance even when it’s not required can make it very difficult to recover from a major loss.”

If you’re considering getting homeowners insurance or looking to switch providers, here are some important things to keep in mind.