Ask the Home Insurance Expert
Am I required to carry home insurance if my house is paid off?
No. But there are lots of reasons to do so if the total loss of your house would affect you financially.
Home insurance gives you protection so that you don’t have to dip into your own savings (beyond the deductible costs) if major damage occurs to your home – like a tornado ripping off the roof or fire gutting your house.
Would you want to pay for all repair costs if you have a kitchen fire or a pipe burst in your laundry room? If not, then you should keep your homeowner’s insurance policy even after you’ve paid off your home.
Also, as our home insurance basics page explains, home insurance covers much more than just your house structure. It also covers your belongings, structures outside of your home (such as a garage) and thel oss of use if your residence it’s unhabitable due to damage.
A homeowner’s policy also protects you and your assets by providing some liability and medical coverage if you or a member of your household damages or injuries someone else.
You could possibly lose your biggest investment if a catastrophe were to happen and you had discontinued your home insurance policy.