Homeowners insurance is not legally mandatory; you don’t technically need coverage to own a home. Generally speaking, it’s only a requirement if you have a mortgage loan on your property or if you’re the owner of a co-op or condominium.
That said, your home is undoubtedly one of your most valuable assets. Homeowners insurance offers ongoing financial protection, which is maintaining adequate coverage is in your best interests. Your policy also protects you from many types of legal liability.
If you’re concerned about the costs, there are several ways to save.
Why Lenders Require Homeowners to Carry Insurance Coverage
Lenders require insurance coverage to protect their financial investment.
If a homeowner stops making mortgage or home equity loan payments, the lender can take possession through foreclosure – which means they have a vested interest in making sure the property remains in good condition and doesn’t drop in value. Should an unforeseen disaster occur, insurance helps safeguard the lender from financial loss.
Why Dropping Insurance Coverage after Paying off a Mortgage Is a Bad Idea
If you have paid off your mortgage and have no other loans out against your property, you can opt out of insurance coverage. However, going that route is incredibly risky.
One single incident – such as a fire or a tree crashing down on the roof – could render your home uninhabitable. Without coverage, the costs of repair and damage remediation come out of your pocket. The expense could be in the thousands, or even tens of thousands, and if you cannot afford to pay, you may be left homeless.
And don’t forget – homeowners insurance doesn’t just protect the physical structure of your home. Your policy also covers your belongings and provides liability protection in the event of a property damage or personal injury lawsuit.
When you consider how much of a financial shield insurance offers, dropping coverage is a definitely a huge gamble.
How to Save on Homeowners Insurance
No one wants to pay more than they need to for insurance coverage. To bring down your costs, take any or all of the following steps:
- Work on improving your credit score
- Choose a higher deductible
- Bundle your insurance policies
- Consider paying upfront
- Install a home security system
- Upgrade your plumbing or electrical system
- Replace your roofing
The easiest way to save on homeowners insurance? Work with an independent agent. An agent can shop around for the best possible rate and, often, find ways to further discount your costs.
If you’re ready to pay less for the protection you need, turn to the friendly and knowledgeable independent agents at Four Seasons Insurance Agency. We make finding affordable, reliable coverage an easy, stress-free experience.
Based in northern Utah, Four Seasons Insurance Agency is a family-owned business that serves residential and commercial clients in the greater Salt Lake City area and the surrounding communities. For a free homeowners insurance rate quote, contact our Sandy or Taylorsville office today.