Congratulations! You’ve finally done it—you’ve paid off your mortgage. But now you may be asking yourself, do I still need home insurance in Evergreen, CO after paying off my mortgage?
Yes, home insurance is still needed after you have paid off your loan. Davidson Insurance Agency explains why.
The Importance of Home Insurance
Home insurance provides financial protection for you and your family in the event of any major damage to your home or property, such as a fire or natural disaster. Without home insurance, any repairs that need to be made would come out of pocket, which can be financially devastating. It is still important to keep coverage on file to protect yourself from unexpected events.
In addition to protecting your finances, many states also require homeowners insurance for certain reasons. For example, lenders often require proof of homeowners insurance before approving a loan or refinancing an existing loan. This protects the lender from taking on additional risk by extending credit without the security of an insurance policy backing it up.
Types of Coverage You Need
Now that you know why home insurance is necessary, let’s discuss what kind of coverage you need. The most common types of coverage include dwelling coverage and liability coverage. Dwelling coverage covers physical damages caused by natural disasters like fires or floods while liability coverage offers protection against someone getting hurt on your property and covers legal costs associated with a lawsuit if necessary.
Home insurance should always remain in place even after paying off your mortgage. It’s important to understand what type of coverage you need so that you are properly protected from any potential issues that may arise down the road. More questions? Contact Davidson Insurance Agency in Evergreen, CO today.