There's no better feeling than the feeling you get when you make your last mortgage payment. Owning a home outright is a common milestone for many families and for those traveling along the road to financial independence. While your bank or home lender required you to have homeowner's insurance as a condition of your mortgage, you're not legally obligated to keep your insurance coverage after you've paid off your home. Nevertheless, there are still plenty of reasons why you should hold on to your coverage.
It'll Protect Your Home Against Catastrophic Losses
Imagine paying off your home only to lose it to a fire, tornado, or other catastrophic event. There's a good chance you may not have enough in savings to rebuild your home. Without any savings, you may be forced to take on another mortgage payment or pay rent for an apartment or home until you're able to rebuild.
With homeowner's insurance, however, you'll be able to quickly rebuild your home if something happens to it. If your home turns out to be a total loss, your homeowner's insurance policy can also help you purchase a new home. You won't have to dread putting yourself back into debt or draining your savings to rebuild or replace your home after the worst happens.
It'll Also Protect Your Recreational Vehicles
With your home paid off, chances are you'll have enough disposable income to afford a few toys, whether it's a new boat or a couple of jet skis or ATVs. These recreational vehicles are usually covered under their own insurance policies, but those policies may have limitations in a number of areas. For example, your boat insurance policy may cover your boat while it's in the water, but not while it's on land.
Your homeowner's insurance policy can protect your boat, ATVs, and other recreational vehicles while they're parked at your home. If something unexpected happens, such as a hail storm that damages your boat, your homeowner's insurance will cover the cost of repairs or replacement. Some homeowner's policies may also cover your recreational vehicles if they're vandalized or stolen from your property, although it's a good idea to check the fine print before relying on your current coverage for these events.
It Offers Protection Against Liability Lawsuits
Imagine having a house party that goes off without a hitch, only for one of your guests to accidentally slip, fall, and injure themselves on your property. At this point, you're liable for any injuries that occur to your guests, as well as any damage that happens to their property on your premises. If your house guest files a lawsuit to recover their medical costs and other damages, you could find your financial well-being and your home at risk.
Homeowner's insurance offers liability protection in case someone is injured on your property or has their property damaged on your premises. With this coverage, you'll be able to shield yourself from the financial implications that often come with someone being injured on your property. It'll also save you the trouble of paying out of pocket for any damages caused to their property. If a tree falls on a guest's car, for instance, your homeowner's insurance will pay to replace the vehicle or repair the damage, which means you won't have to drain your savings or borrow money just to pay for the damage.
It'll Protect Your Valuables
If you've collected various works of art, jewelry, and other valuables over the years, then it's hard to imagine how you'll replace it all if it's ever stolen or damaged. Most homeowner's insurance policies allow you to add a rider that protects your high-value collectibles for as long as you own them. Without homeowner's insurance, you may be forced to purchase standalone fine-art insurance, which could cost more than your current homeowner's coverage.
For more information, contact an insurance agency like Gateway Insurance.