Most homeowners are required to have home insurance initially, while their home is being mortgaged. Lenders want to know that the home’s value will not be affected, should something happen to the home.
Once you pay of your home however, insurance is no longer required. Because of this, some homeowners may be tempted to cancel their insurance once their mortgage is paid off.
If you have recently paid off your home and are trying to decide whether to keep insurance on it, it’s important to research the issue, and to take into consideration that your home is a valuable investment, one that you would not want to risk losing due to a catastrophe or event that’s beyond your control.
Before you make the decision, here are a few things you should keep in mind.
If you have paid off your mortgage, then your house is probably the most valuable asset you own. Naturally, you will want to protect this asset and the belongings inside. Most people don’t have enough money to rebuild should something happen to their house - and even if they do, the amount of money that it would take to completely rebuild would present a major financial setback.
Even though you don’t have a mortgage, you still have liabilities. Your homeowner’s insurance policy also offers protection in case someone is injured on your property. A lawsuit can do more than just put a dent in your bank account; it can cause you to lose your house if you don’t have enough resources to pay. Homeowner’s insurance contains valuable liability protection in case of a lawsuit.
Whether you choose to keep or drop your home insurance, make sure that you don’t base your decision solely on eliminating premiums.
If you are looking to save money, there are other ways that you can save -such as opting for a higher deductible. Be sure to consider all options before forgoing insurance on your home.
At Texas Insurance Agency, we want to help you save! To find out how affordable it can be to protect your home, contact Texas Insurance Agency today.