Should We Maintain Homeowners Insurance?

Question

My business partner and I purchased a property in cash recently and are just about to finish up the rehab work. The house is a buy and hold property that we plan on renting out here very soon. Because we didn't finance the house, we don't currently have homeowners insurance. Seems like an obvious question, but do people still maintain home owners insurance even after their home is paid off/purchased in cash?

Jonathan W. · Answer

@Mark Millich

Are you willing to loose what you paid for it? A fire could start anytime and your out your money. Pay the 1k-2k to protect yourself and money. What happens if someone looking at your places falls and gets hurt. You ready to pay out?

Ruth Geller · Answer

As mentioned previously it is still recommended to have insurance even if it is not financed. Even if you are willing to take the risk on the Property and take a loss if the house would burn down completely - in the event of a third party claim - liability lawsuits can be costly.

Mike McCarthy · Answer

@Mark Millich I know I couldn’t afford a catastrophic event. If the house burned down, could you afford that loss?

If it’s a $50K house... maybe property insurance isn’t fully necessary. But you still should consider things like liability insurance. What if a local kid ends up on your property and hurts themselves?

I don’t usually believe in insurance for things that I can cover myself (new washing machine). But for things that would put a real dent in my financial situation (house burning down, personal injury lawsuit), I absolutely have insurance.

Charles Carillo · Answer

@Mark Millich

Yes, you should definitely have insurance on the property! If it is vacant and you do not live there it will usually be a different policy than a normal homeowners policy. You can also opt for the highest deductible policy they offer to save some money and roll the dice but either way; call your agent today!