One of the requirements that your mortgage lender has in place is that home insurance is maintained as long as the loan is active. Once you settle the mortgage in full, do you have to keep the policy in force? While some jurisdictions to not require homeowners to maintain at least a minimal amount of coverage, it’s in your best interests to keep paying those premiums even though no one else now has a financial stake in the place. Here are some of the reasons why.
It’s Not Just About the House
The provisions in your home insurance policy are not just about the structure itself. Did you know that your plan also includes protection against theft? If a burglar breaks into the home and steals furnishings, electronics, or any of your belongings, there is a good chance that there is a clause in your policy to cover the loss. While it won’t undo what has taken place, the benefits from the policy will at least help you replace the items that were stolen.
Keep in mind that the terms of the policy also come in handy if someone is injured on your property. What would happen if a guest slipped on an area rug and managed to strike the head on the edge of a coffee table? How would the medical expenses be settled? You have protections in your insurance policy that cover accidents of this type and ensure the resources are on hand even if legal action is taken against you.
Have you noticed that your policy includes a benefit for temporary relocation? If your home is damaged due to a covered event and living in the structure while the repairs are underway is impossible, the provisions of your home insurance will cover all or part of the cost of renting a temporary place to live.
The bottom line is that you need your coverage even after the mortgage is paid in full. Take a good look at your current home insurance plan and compare the scope of coverage with the plans offered by the competition. Doing so will allow you to settle on a policy that provides the best coverage for the most cost-effective rate.