Though most homes have coverage, there are still many that remain entirely uninsured.
The majority of US homes are covered by property insurance, but there has been a trend causing homeowners to drop their coverage, placing themselves at substantial financial risk.
The Insurance Information Institute reports that as of 2023, 88 percent of homes in the US are covered.
That said, this figure means that 12 percent of US homes are not protected by property insurance. Moreover, that number has more than doubled since 2014, when it was only 5 percent.
“If you own the home outright, you want to have a financial safety net,” said a statement from Insurance Information Institute spokesperson Michael Barry. “You look at 2023 – all of the tornadoes we’ve seen in Rolling Fork, Mississippi and Little Rock, Arkansas. This has been an extraordinary year for tornadoes in the United States.”
The reason Barry was primarily addressing homeowners who own their properties outright is that most mortgage lenders require the coverage. Therefore, those who aren’t covered are typically also those whose homes have been paid off.
Even when a mortgage is paid off, experts advise that property insurance be maintained to cover risk.
“Even if you’ve paid off your mortgage, you’re basically taking a big gamble that you will be fine and that you won’t be subject to a natural disaster where you could lose everything,” said Consumer Federation of America researcher Michael DeLong.
Most financial advisers recommend that instead of dropping coverage, it is a much more financially sound move to look for opportunities to save money on monthly premiums. For those who have paid off their homes, one of the most direct ways to cause monthly premiums to fall is to raise the deductible. While it would still increase the out-of-pocket expenses that would need to be made before coverage kicks in on a claim, that figure would still likely be substantially lower than it would be without any coverage at all.
Many property insurance companies also offer various types of discounts for making improvements to a home to build its resistance to weather-related risks. Homeowners are encouraged to contact their insurers to find out what might apply to them.