Should I Change My Home Insurance When the Mortgage Is Paid?

You fully paid off your mortgage. Congratulations! That’s a major achievement, and it usually feels pretty good. Now that you’re free of the bank, you might want to change some things about the house and how you deal with it. It’s pretty common for people to rethink their home insurance at this juncture, and that’s not a bad idea. Here’s what Epic Insurance recommends to Lees Summit homeowners who have paid their mortgages.

Insurance Requirements

In order to get a mortgage, the lenders have certain rights, and included in that is the right to somewhat dictate your homeowner’s insurance requirements to you. They can require certain amounts of coverage, and they will always include it in the contract. This protects them from losses if something happens to damage the home.

When you are free and clear of your mortgage, those requirements go away. There is no longer a lien against your house, so no one has any say in your insurance policy except you. That means that you have an opportunity to explore new coverage options that may not have been acceptable to your lender.

Maintaining Coverage

While exploring new options might enable you to find a better overall policy for your situation, policy switching is something that requires a little diligence. You want to be sure that you are not creating coverage gaps. For many people, their home is the most valuable thing they own. You don’t want to leave it at risk by having a lapse in home insurance.

There’s a second thing to consider. Your lender set insurance minimum requirements because they were protecting their investments. They have spent a lot of time optimizing insurance requirements, so think carefully before you downgrade your total coverage.

Finding the perfect policy is a large task, but the agents at Epic Insurance can make it much easier. They know Lees Summit, MO, and what it takes to properly insure homes in the area.