FRIDAY, OCTOBER 6, 2023
This does not mean that you have to maintain the same amount of coverage, however. Lenders generally require you to carry enough home insurance to cover your mortgage. Insurance agencies, on the other hand, recommend that you carry enough home insurance to cover the total replacement cost value of your home. The total replacement cost value is how much it would cost to completely rebuild your home after a disaster, including building and material costs. This amount is not the same as your mortgage, nor will you have to pay for the entire value. 
For example, say your home’s total replacement cost value is $300,000. This is the amount of coverage you should carry—not the amount you will pay for insurance. Your home insurance premiums will be affected by the same factors as before you paid off your mortgage. This includes your location, claims history, credit score, deductibles and more.
After the requirement for your home insurance is gone, be sure to keep in tact with your home insurance provider in order to ensure that your home is protected for as much as it needs to be. In general, you should carry 100% of your home’s total replacement cost value in home insurance whether or not you’ve paid off your mortgage.
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