Do You Still Need Home Insurance if Your Mortgage is Paid Off?

If you live in the Atlanta area, then you know that your real estate is valuable. Your home is one of the most important investments you will ever make. Therefore, you need to protect it. Even though it may take you years, and possibly decades, you will probably pay off your mortgage. At that point, do you still need homeowners’ insurance? Is this required by law? There are a few important points you should keep in mind.

Your Mortgage Company Will Require Home Insurance

First, understand that your mortgage company is probably going to require you to have home insurance. Home insurance is usually included in your monthly premium, along with your mortgage and real estate taxes. Your mortgage company wants you to have home insurance because this insurance policy will be used to pay off the balance of your loan in the event something happens to your house. If you do not have home insurance, your mortgage company may purchase it for you on your behalf and pass the expense on to you. So, with that said, if you still have a mortgage, you have to have home insurance.

What Happens After You Pay Off Your Mortgage?

Once you pay off your mortgage, the lender’s responsibility disappears. Therefore, it will be up to you to decide if you want to have home insurance. Even though you are not required by law to have home insurance, you should probably still purchase it. What are the risks of not having home insurance?

The Risk of Not Having Homeowners’ Insurance

If you would like not to have home insurance, you take on a significant amount of risk. A few examples of risks you might take without a home insurance policy include:

  • If someone breaks into your home and steals all of your valuables, you may not be able to get reimbursed for them.
  • Also, if your home burns down in a fire, you will not be able to get much money for your property, making it difficult for you to find a new home.
  • If your home is damaged by a flood, you may have to cover the cost of your repairs out of pocket, which can be prohibitively expensive.

These are all serious risks, which is why you need to protect your home with a comprehensive home insurance policy.

Protect Your Investment with the Right Home Insurance Policy in Atlanta

Clearly, it is important for you to continue to have home insurance even after you pay off your mortgage. Your home is one of your most valuable investments, so you need to protect it accordingly. Similar to car insurance policies, there are multiple types of home insurance policies available in the Atlanta area. You should work with a trained professional to make sure you select the right type of home insurance for your property.