Should You Drop Your Home Insurance Coverage Once the Mortgage is Paid Off?

Over the years you’ve had a mortgage on your home, the lender has probably required you to carry sufficient home insurance to safeguard their interests. Whether it took you a short amount of time or the full 30 years to pay off your home, you’ll revel in the fact that you own your home and have the power to retain or drop your home insurance. Be sure to ask yourself the following questions before you decide to cancel your home insurance:

1. Can you afford to start over again? If your home were to become unliveable due to fire, severe weather, or another peril, would you be able to start over with another 15 to 30-year mortgage? Without home insurance, that would be the scenario you’d face.

2. Can you cover the cost for major damage? It is important to remember that home insurance doesn’t just pay out for total loss. They also cover claims for major damage from insured perils, such as a tree falling on the roof.

3. Can you cover the cost for a liability issue? People often forget that home insurance also covers such things as injuries sustained by guests on the property.

4. Can you afford the premium? If you’ve been paying a mortgage with taxes and insurance for years, it will already be a nice break on your budget to be finished with the mortgage itself while still continuing to carry your home insurance. If you’ve enjoyed a long-term relationship with your insurance company, you are probably paying a very reasonable premium. If you still find yourself wanting to save extra money, talk to your insurance broker about ways you could adjust the policy to lower your costs rather than cancelling the policy completely.

Here at Jamieson-Hilts Insurance Brokers Ltd., we are happy to help you with home insurance solutions whether you have been a client of ours for years or you are looking for a more affordable solution than what your lender has suggested. We have been providing quality insurance solutions in the Woodstock, Ontario area since 1865 – we live and work here alongside you, so we understand what you want out of your home insurance policy. Call us today to discuss your home insurance needs and set up a home insurance policy that is right for you.