What happens if you cancel your homeowners insurance if you have your home paid off?

Question

Are there places where the towns require you to maintain insurance? Of course, if you had a catastrophe, you would have to fund it with your own money.....

Answer 1

The only people that would require you to have HO insurance is your mortgage company. It would be VERY dumb to cancel it just because it's paid off. What if it burnt to the ground? You'd be SOL

Answer 2

Essentially that means that you are willing to totally self insure your home.  No help, period.  Your not required to maintain a policy if  your home is paid in full...  people are required when they have a mortgage.

Answer 3

Nothing happens except, as you say, you assume responsibility for paying for any damage to your house. It is a calculated risk. The trouble is, if you home is badly damaged, you will likely lose so much equity that you will not be able to use it as collateral for a loan. You also will not be able to sell it in damaged condition. That leaves you with the option of living in a damaged home (if it is still safe) or paying for repairs out of pocket.

Answer 4

I have never seen any by-law or municipal statute that required a Homeowner to carry Homeowner's insurance. Most municipalities have some sort of by-law that states if a home is damaged beyond 'x'% then the entire structure must be demolished. So if your local by-law states a home must be demolished if 75% of the home is damaged (i.e. by fire) then the local by-law would force you to pay to have the rest of the building demolished and the debris removed. If you failed to do so the municipality may do so and send you the bill. Fail to pay the bill and they will seize the land. Of course if you had insurance, and assuming the loss is covered, insurance would pay for the demolition and debris removal and rebuild the house.

Answer 5

HI,Well, Well,you answered your own question.

Answer 6

Sorry that is the least educated idea for any home owner.!

keep ur insurance it is cheaper by hundred of thousand$.

u can lose the house and have nothing but dirt to live on.

Answer 7

You should keep your insurance and find other ways to cut back in your budget.

Your final question does not make sense?? Why would insurance companies want to damage property on purpose to PAY OUT claims? They make more profit when nothing happens.

Answer 8

No, nothing happens.  I've never heard of a law that requires homeowners insurance.

If the house burns down, nothing happens.  If it gets broken into, nothing happens.  If someone gets hurt on your property - YOU write the check.

I think it's STUPID to not have homeowners insurance -  not from the property point of view, but the liability point of view.  The property loss is limited to the value of your house and contents.  There's no limit to a potential liability loss - you'll lose the house, and can STILL have your wages attached until you're dead, for a serious loss.