No Homeowner's Insurance? You Are Risking It All.
When you have a mortgage, carrying homeowner's insurance is mandatory. Your lender is simply not going to let your home be unprotected. Once you pay off your home, however, you may be tempted to let the coverage slide, particularly if you are hit by some big bills. Going without coverage or with minimal insurance may expose you to great financial loss.
Cost
Homeowner's insurance can certainly be expensive. If you look at the premiums and your deductible, you may believe that you can simply not afford the thousands of dollars that good home coverage costs you every year. However, imagine that your home is destroyed by a fire or windstorm. You will not only lose your home, but your possessions as well.
You can be wiped out in a matter of minutes. Before you let your policy lapse, consult with a trusted insurance agent and explain your situation. They may be able to find a policy that you can better afford. Combining your auto insurance with your home insurance can often lower your premiums. Switching from an annual payment to monthly payments may also be helpful for you.
Lowering your coverage is risky, but a modest reduction may work for you. Lowering your coverage from 100% to 90% of your home's replacement cost will save you some money without exposing you to a big loss. You can also raise your deductible to lower your rates. However, you need to have funds available to pay for that deductible if disaster strikes. You can open a savings account just for that purpose.
Lawsuits
If you are a homeowner, you are vulnerable to lawsuits if someone is injured on your property. Most homeowner's policies cover you in this instance. They often pay the injured third party's medical expenses and your potential legal fees. Unless you are planning to wrap your guests in cotton batting and plastic wrap, they can easily be injured by a slip and fall or some other hazard on your property. If you do not have the proper insurance, you could face a financially-devastating lawsuit. Since juries are unpredictable, you could end up paying stiff damages if you are sued by the injured party.
Homeowner's insurance really is not a luxury. If the price of your policy has gotten out of hand, discuss your options with your insurance agent. You should be able to get more reasonable coverage that will protect your home and its contents from loss. Unless you are independently wealthy, you cannot afford to go without coverage. Contact a company like Kuresman Insurance for more information.