Should I Drop My Home Insurance if My Home Is Paid Off?

Think Before You DropSome people believe that they no longer need home insurance in the state of California once their home is paid off. After all, if the mortgage balance has been satisfied in full, there is no way that they will have to fork over a large sum of money again, right? That is actually an erroneous assumption, and here are some reasons why even those with paid-off homes still need California home insurance:

  1. Disaster Protection — A home might be paid off, but it is still susceptible to damage from earthquakes or other natural disasters. The cost to repair or replace a home that has been hit by such events is tremendous, far beyond what most people have accessible in their savings accounts. A California home insurance policy will pay the homeowner what it will cost to fix the home up to the policy limit.
  2. Personal Liability — It is all too easy to get sued in today’s world, and homeowners are in a lot of trouble when they lose a personal liability case because the court-ordered payout to the plaintiff could cost well into the hundreds of thousands. A good homeowners insurance policy will pay for these damages, whether it is Los Angeles homeowners insurance for Los Angeles’ residents, San Francisco homeowners insurance for residents of San Francisco, or home insurance for those who live in other California cities.
  3. Theft Protection — Finally, homeowners who have paid off their mortgage may still suffer the loss of their possessions through burglary or other forms of theft. Quality California home insurance policies include contents insurance that pays the replacement costs for stolen merchandise according to the policy limits.