Q: I am excited about the fact that my house is going to be paid off in 3 more years. Do I need to make any changes to my home insurance policy because the house is paid off? What about changing my will?
A: Congratulations on closing in on your pay-off day. The answer to your question is “No.” You don’t have to change anything to your insurance policy or will (provided that you have a valid will).
If you haven’t done it recently, you may want to update your insurance policy now to reflect the higher cost of rebuilding your property if a disaster happens. Call your insurance company and ask them to come out and reassess your property for rebuilding costs.
You should have adequate insurance for your home whether or not you have a mortgage on the home. A lender may require you to carry insurance, but it’s prudent practice to carry insurance and to make sure that you have enough insurance and the right kind of insurance for your home. You really should reevaluate your needs every couple of years.
Sept. 3, 2007.
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