When you make the last payment on your mortgage, you will finally own your house outright. On this day, your house becomes completely yours, and this opens up the freedom to do things you could not do before. One type of freedom you will have is getting rid of your home insurance policy, as you will no longer have someone telling you that it is required. While you can legally do this, there are some risks of not having home insurance, even if your house is paid off, and here are three of the top risks.
You could lose everything and have no replacement money
The top risk of not having home insurance is the potential of losing your entire home and everything in it and not having any money to replace the home and your personal belongings. While you must have insurance if you have a mortgage loan on your house, you can opt out for insurance once you pay off the loan. Doing this is probably not a good idea, though, unless you have a lot of money in the bank and would not mind losing hundreds of thousands of dollars if your house burned down to the ground.
Someone could sue you and cause you to lose everything
Secondly, home insurance offers liability coverage, which is essential if you own a house. Liability coverage is the protection you have against people who file lawsuits against you for accidents that occur on your property, and this coverage is designed to cover anyone that visits your home. This includes your friends, relatives, neighbors, and delivery workers. If anyone visited your home and ended up injured for any reason, it is your liability coverage that would pay the claim. If you get rid of your home insurance, you would not have any liability coverage to cover these types of issues.
You could have problems getting another policy
The other risk you take is the risk that you may have problems finding a home insurance company that would offer to cover your home if you have a lapse in your policy. Insurance companies are leery of insuring people with lapses in coverage, and this is true for several reasons. The main reason is that insurance companies might suspect that you are planning on filing a claim soon if you are now getting insurance on a house that has not had any insurance for an extended amount of time.
If you are looking for ways to save money on home insurance but do not want to completely cancel your policy, talk to a home insurance agent to learn more about ways you can save money while still keeping an insurance policy on your home. You can also get an updated insurance quote to make sure that you're getting the best deal for insurance.
Share5 December 2018
When I lost my job, I also lost my health insurance. I've never had to buy health insurance on my own before, so when I went to my insurance agent, I had no idea where to start. The coverage options, deductibles, co-pays, and premiums were confusing. I wasn't sure how to make sense of all of the tiers and doctor's networks. I created this site to help others who've never purchased health insurance before. The posts here are full of resources for insurance coverage, and I hope that it will help you to find the policy that's right for you.
