Should You Drop Home Insurance Once You’ve Settled the Mortgage?

It is always a wonderful feeling to have any debt completely satisfied. You may be so relieved that you’ll never have to make another payment on your home that you may forget that the check usually covers taxes and home insurance as well. While your property tax assessor is sure to keep you on track with the taxes, you should make sure to keep the home insurance policy in effect as well. Here’s why you should not drop your coverage once your home is fully paid for:

  • You have already been paying it, so it’s in your budget already. You won’t have the principal and interest to pay, so you’ll still enjoy a nice injection into your monthly income. Take that and enjoy it but don’t put yourself at risk by proceeding uninsured.
  • You don’t want to start over. If it took you 30 years to pay off your home, do you really want to start over again because you have to buy a new home? Of course not, so you still want to know you’ll have money to rebuild or relocate should your home be destroyed.
  • Can you afford major repair? Home insurance doesn’t just cover total loss. It also covers major damage and other issues that you’d have to pay out of pocket if you drop your coverage.
  • Can you afford other liability claims? Home insurance also covers several liability issues that you definitely don’t want to pay on your own.

The best thing to do is talk to your insurance agent to learn what your home insurance covers so you can see the value that it provides. You may be able to make some changes to lessen the premiums if that is of concern but don’t cancel it completely.

If you have any questions or would like to investigate various insurance company options, give us a call at First Security Insurance. We represent many of the finest carriers in the industry and with nearly 100 years of experience, we are confident we can help you keep your home insurance in place, so you can have peace of mind that you won’t suffer financial burden due to a loss.