Q: Am I legally required to have homeowner's insurance? If not, how do I know if I should have it or not?
A: In most instances, homeowner's insurance is required by your mortgage lender. They require this insurance policy so that in the event of damage to your home, they know that your home will be rebuilt. That way, they continue to have an asset to support their loan.
If your home is completely paid off, the choice to insure it is up to you. However, one of the basic rules of insurance is to not take a large financial risk (the destruction of your home) in order to avoid a small one (the payment of an insurance premium.)