No law in the US requires you to buy homeowner’s insurance when you own your home.However, many homeowners stress much less and sleep better at night knowing their financial future is more secure with a solid H/O policy.Today, of experienced home insurance agents at Einsurance.com is here to answer all your questions about the need for home insurance, and the risks of not having homeowner’s insurance for a paid-off home.

As always, we hope to present this unbiased information in a way that will entertain and educate our readers.Insurance can be complex, and we aim to break it into reasonable bites for the average consumer.Read on to discover: Let’s start by tackling that big question, “Do you need home insurance if you own your house?” Do You Need Home Insurance if You Own Your House? We believe you should always insure your home, especially if it is your primary residence.

And even if you have several homes, rentals and vacation homes, you will discover that high-net-worth individuals with assets do their best to protect those assets with insurance.Homes are Valuable Assets Homes are valuable assets, and in some cases, they are very valuable.Whether you worked hard for 30 years to pay a mortgage on your dream house or inherited a dilapidated family home that seems more hassle than benefit, your home is probably worth considerable money.

Fun Fact: According to the , the average sale price of a home in the US in late 2025 is $512,000! But even a much lower value home is worth insuring, especially if you live there, house your beloved family and your precious belongings there, and would be without a home if it were lost to a fire.And there are other reasons why you may prefer to buy an “HO policy” when you own a home completely, like liability coverage.Homeowner Insurance Provides Liability Coverage The includes liability coverage, which can protect the homeowner from expensive lawsuits.

Most policies offer liability coverage ranging from $100,000 to $300,000.Depending on your state, insurer, and specific contract, your liability coverage could come into play when: The point is that insurance will pay for these problems, and homeowners do not even need to cover a deductible.You can rest easily knowing these costly injuries and damages will be handled.

Some Key Points Absent from Homeowner’s Liability Coverage Notably absent from most homeowner liability coverages are damages caused by a home business.If you are running a childcare business at home, for example, you need to buy separate liability insurance for it.Otherwise, you may be on the hook to pay medical bills for a child who gets hurt while under your care.

This is also true for things like: What About Injuries or Damages Caused by Pets? Some home policies also cover injuries or damage caused by a customer’s pets.Mostly, we’re talking about dog bites, which can lead to expensive medical care and even psychological care for the victim.Fun Fact: According to the , some insurers specifically exclude dog bites performed only by certain breeds, like pit bulls or Doberman pinschers.

Furthermore, most insurers exclude exotic or dangerous pets from liability coverage.(If pet tiger bites someone, he may never recover financially.) A Side Note on Dog Bite Liability and Homeowner’s Insurance This is slightly off topic, but it is worth mentioning, as .Dog bite lawsuits have become more prevalent lately.

According to , dog bite claims numbers have soared in both frequency and cost.Ultimately, between 17,000 and 18,000 dog bite lawsuits are filed in the US every year.Each one costs insurance companies anything from $10,000 to $100,000 in settlement to the victim, plus legal fees, attorneys fees, and so on.

For these reasons, some insurers are now refusing to cover ANY dog bite liability.It is specifically excluded on the policy contract.Other insurance companies review each instance of dog ownership on a case-by-case basis.

And, if a customer does not report the ownership of dogs when they get their first quote for insurance, they may be seen as a moral hazard by insurance companies.Dog Bites and Homeowner Insurance Claims History Lastly, once you have a dog bite liability claim on your insurance history, it may be very difficult to find affordable home insurance in the future.Insurers will log this information in their shared databases, and a dangerous dog may become a difficult roadblock for homeowners.

Now, let’s refocus on the benefits of keeping homeowners’ insurance when you own your home.More Advantages of Keeping Home Insurance After a Mortgage Payoff A property that is insured today is easier, and usually cheaper, to insure tomorrow.Insurance is all about risk management.

Therefore, insurance companies prefer to do business with customers who manage their risks thoughtfully.This includes purchasing insurance as well as performing any other duties that reduce their risks of loss (like maintaining or installing a security system at home).If you are considering cancelling your home policy altogether, or letting it lapse by avoiding the payment, know that insurers will be reluctant to insure your home in the future.

That reluctance might manifest as incredibly high premiums, or a total refusal to insure your property.On Lapses and Other Red Flags (from the Insurer’s Perspective) From the view of an insurance company, when a customer allows their homeowner’s insurance coverage to lapse due to non-payment, it is a huge red flag.That customer may spend a lot more on their next policy.

The same coverage might cost a lot more, because — from the view of the insurer — this consumer did not master risk management, or did not budget responsibly.In short, you are better off shopping around for a more affordable policy and finding other ways to save so that the insurance bill gets paid on time.Remember, all the major insurers share detailed databases of customer information, and they do so eagerly! If you have accidentally allowed your home policy to lapse on your fully owned home, be upfront about this fact when shopping for new home insurance.

Lying about this, or anything, when getting a quote is considered a misrepresentation, and can lead to higher premiums.Another Potential Advantage: Savings on Other Insurance Products Most consumers hope to save money wherever possible.One potential advantage of keeping your home insured after the mortgage is paid off could be savings on other types of insurance.

If you’ve read , you may already know about insurance “bundles,” and discounts for multi-line policy holders.Bundles & Multi-Line Discounts In a nutshell, insurance companies love it when a customer has several types of insurance with one provider.It proves to them that a customer has assets, is likely employed, and cares about their belongings.

It also makes billing and customer service easier for all parties.Your home insurer might help you get lower prices on: Between all those different lines of insurance, some consumers might save hundreds of dollars every month by bringing all those products to one insurer.Possible Setbacks of Insurance Bundles This common marketing play does bring some potential setbacks for consumers.

The insurance company may raise the premiums on one line at any time.Then, the consumer risks losing other discounts when they leave.Or, if this insurance company decides to leave the market entirely, the consumer could find themselves shopping for new insurance on everything.

That could be a hassle if you didn’t know about Einsurance.com.If you are still wondering if you need homeowner’s insurance if the home is paid off, let’s talk about the risks of going without it.The Risks of Not Having Homeowners’ Insurance for a Paid-Off Home The most obvious risk of not having homeowner’s insurance for a paid-off home is that it could burn down, leaving you without a home or belongings.

Residential Fire Risks According to the , there were 344,000 home fires in the US in 2024.That is on the low end; 350,000 to 400,000 residential fires are standard statistics.All HOPs (home insurance policies) are built on the notion of fire coverage, first.

In other words, if an insured home burns to the ground, the insurance company will pay (up to policy limits) a check to cover the home, its contents, outside structures, and debris removal.Fire risk is a major concern; that’s why your previous lender/mortgagee made sure you had insurance the whole time.The risk is that you will be homeless and without any belongings after a total loss.

Small Fires are Expensive, Too And even smaller house fires can be extremely expensive.A relatively minor kitchen fire could easily cost $20,000 if it destroys cabinets, accessories, foodstuffs and appliances.Costs can increase if there is smoke damage to the rest of the home, and if a neighbor’s home is damaged by your smoke, you can be sued in civil court for those repairs as well.

For an insured individual, those costs would be mitigated to only the cost of their deductible.The insured customer will pay their deductible, ranging from $500 to $5,000, for their home repairs, and pay nothing for the smoke damage next door, which would be handled with liability coverage.Perils Beyond Fire Other types of damage can happen to your home, too.

The good news is that homeowner’s insurance will cover many perils, such as: The points not usually covered on a standard home policy include floods and earthquakes.Now you might be thinking, “Cool story, but home insurance is too expensive.” There are some ways you can mitigate the costs.Ways to Save Money on Your Home Insurance Premiums You may be researching the rules, advantages, and risks surrounding home insurance for a paid-off home because you are trying to trim your budget during these unusual economic times.

Home insurance is expensive, we understand! Before letting your policy lapse, or cancel it, sit down and plan a budget.Understand how much money is coming in and leaving the household and see which areas can be trimmed.For instance, Americans spend roughly $46 per month on streaming services.

Maybe those costs can be narrowed to only one streaming service at a time.Consider bundling all your insurance products with one provider.This might save significant money every month.

Shop around for the best prices and try Einsurance.com.Our handy online quoting tool will drive insurers to compete for your business.Finally, consider lowering your deductibles, or limiting some coverage amounts.

Real estate doesn’t always depreciate, but if you are over-insuring your home, it is worth speaking to an agent to find a more affordable plan.We hope you’ve enjoyed our dissertation on homeowner’s insurance for consumers who own their home outright.Leave us a comment below if you have any questions.