Paid Off Your Mortgage? Time To Update Your Home Insurance Policy
Making the last payment on your home mortgage is an event that calls for a celebration. It takes many years to pay off a home loan, but eventually, you will pay yours off if you keep making the required payments. When this day arrives, you should contact your home insurance company to update your plan. Here are several things to know about updating a home insurance policy after paying off the mortgage.
You Do Not Have a Lienholder After Paying Off Your Loan
One reason you should update your plan when you pay off your mortgage is to remove the lienholder from your insurance policy. A lienholder has rights to your house when listed on your policy. Once you pay off your mortgage, you will not have a lienholder that you owe money to for your house. As a result, you might want to contact your insurance company simply to let them know that you paid off the loan and no longer have a lienholder on the property. Your insurance agent will update your plan by removing the mortgage lender from it.
You Should Make Sure It Covers Everything
The second reason to update your plan is to ensure that it covers everything. When you buy a home insurance plan, you base your coverage needs on your house and life at that time. Homes and lives change, though, which means you might need to make changes to your home insurance plan occasionally. If you do not already make changes every year or two, you should definitely do this when you pay off your mortgage.
You Might Want to Increase Your Deductible
The last reason to update your plan at this time is to change your deductible. Now that you paid off your loan, you might have more money in your pocket each month. As a result, you might want to increase your deductible on your policy. When you increase it, you will see a decrease in your premiums. While you will have to pay more if you file a claim, you can save money each year on your insurance costs.
Keeping your house protected with home insurance is vital even after paying off your loan, but updating your plan is a smart move every year. If you recently paid off your loan or have not updated your plan in the last year, you should contact a home insurance agent to make sure you have all the right coverage types.
For more information on home insurance, contact a company like Kyle Insurance group LLC.
