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Home Insurance on a Paid-Off Home

You might think that once your home is paid off you can drop your home insurance and live a carefree life with no insurance premiums. But just because there are no state requirements to hold home insurance on your house, that doesn’t mean that this useful coverage should be ignored after your home is paid off.

Your home could endure an insurable incident whether or not you have a mortgage. After all, it is not the fact that you owe money on your home that exposes you to risk-it is the fact that risk is everywhere and could happen to anyone. You see, when you have a mortgage your lender is at risk for damages to your home because they have more money riding on it than you do. That is why they demand that you have home insurance. But if you think that you don’t need to look for home insurance quotes once your home is paid off, then consider this: if your home catches fire, floods, is vandalized or has any other insurable event happen to it then you must pay for the damages out of pocket unless you have insurance. You might not even have a home left to live in until you can find the money to pay for all the repairs and in the mean time, you will be forced to pay out of your own pocket for your temporary living space.

Of course, you can look for less expensive home insurance quotes once your home is paid off. You could consider raising your deductible since you no longer have a mortgage to pay off and can likely afford to pay more deductible out of your own pocket. You can look for lower limits as long as you stay within the range that your home is worth so you can be fully reimbursed for an event that destroys your home. You can even determine what is and isn’t covered based on how you perceive your risk.

Remember, while saving money on home insurance quotes is important, having an insurance policy that is there for you when you need it is vital. Don’t scrimp too much on the policy and make sure you look out for your own self-interest and bottom line.

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6 Responses to “Home Insurance on a Paid-Off Home”

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