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Here’s a common question, especially in states like Florida and others with skyrocketing insurance costs:
My husband and I are 68 and 70. We just made our last mortgage payment. Our homeowners insurance went up again this year, and now it’s more than $3,000. Nobody’s making us carry it anymore. Can we just drop it and keep the money?
Let’s call them Ron and Deb. And their frustration is easy to understand.
Insurify projects that the average annual home insurance premium will rise 4% this year to about $3,057, after jumping 12% in 2025, Bloomberg reported in March. Since 2021, premiums have climbed 46%, roughly three times as much as inflation, Insurify said. (1)
And Ron and Deb are right that no mortgage lender is forcing them anymore.
The National Association of Insurance Commissioners notes that “Most mortgage lenders require you to have insurance as long as you have a mortgage” — and Ron and Deb no longer have one. (2)
With the loan paid off, there’s no servicer to force-place a policy on them, either. That’s the coverage the Consumer Financial Protection Bureau says a servicer may require when you don’t have your own policy — and charge you for. (3)
They wouldn’t be alone. Consumer Federation of America researcher Sharon Cornelissen told KCUR in 2025 that about 6 million homeowners around the country lack coverage. (4)
I know a couple of people here in South Florida who have dropped their homeowner coverage: One because they feel it’s overpriced, and another because they literally couldn’t afford to pay for it.
I understand both arguments. My combined premiums for wind, flood and regular homeowner coverage are more than $8,000 annually.
If you can afford to insure your home, however, you probably should. Here are five things to know before you cancel — and smarter ways to handle that bill.
1. Your house is probably your biggest asset — and it’s all at risk
Going without insurance means that if the house burns down, you pay to rebuild it. All of it.
The NAIC’s consumer guide says, “Your coverage should equal the full replacement cost of your home. Note that replacement cost and market value are not the same.” (2)
Ask yourself one question: Could you write that check from savings? If not, you can’t afford to go without coverage. A paid-off house only stays paid off if it’s still standing.
2. Dropping the policy also drops your liability protection
Homeowners insurance doesn’t just cover the house. According to the NAIC, liability coverage “Covers your financial loss if you are sued and found legally responsible for injuries or damages to someone else.” (2)
Think about the grandkids’ friends in the pool, or a delivery driver who slips on the steps. Without a policy, you’re on your own.
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3. Raise your deductible instead
Here’s a better way to cut the bill. The NAIC says, “Higher policy deductibles mean lower policy premiums.” (2)
Its tip sheet explains why: “Deductibles save money because the first dollars of the insurance are the most expensive to buy.” (5)
My rule of thumb: Pick a deductible you could pay out of savings without losing sleep. Then let the insurance cover the disaster you couldn’t.
4. Shop around, and ask about discounts
The NAIC’s tip sheet says “it pays to take the time and effort to shop around to get the best value for your insurance dollar.” (5)
It also notes, “Some companies offer what is called a multi-policy discount.” And some insurers give premium discounts for things like dead-bolt locks, smoke alarms and security systems. (5)
Home insurance rates have exploded — and if you haven’t shopped around lately, you’re almost certainly paying too much. Fight back with comparison sites like Insurify Home Insurance.
Insurify is a free marketplace that pulls real quotes from dozens of top insurers side by side — see your rates in minutes. No endless forms, no spam calls, no obligation — just your best rate.
Ten minutes now could save you hundreds every year. Take a minute and compare quotes right now
5. Know what your policy won’t cover
Even a good policy has gaps. FEMA says, “Most homeowners insurance does not cover flood damage.” It also notes that “Between 2003 and 2023, 99% of counties in the United States experienced a flood event.” (6)
And insurance isn’t a maintenance plan. The NAIC says a homeowners policy “doesn’t pay to repair items that simply wear out, like rotted porch railings.” (2)
Furnaces, water heaters, refrigerators — home systems don’t fail on schedule, and replacing them can run into the thousands. On a fixed income, one bad month can undo a year of careful budgeting.
If that kind of unexpected expense makes you nervous, check out service plans. Example? Choice Home Warranty turns surprises into one predictable monthly cost. When a covered item breaks, they dispatch the technician — you pay a set service fee, not the whole bill. No hunting for contractors, no haggling over estimates — and claims go in online, 24/7.
See what predictability costs — here's what your home would cost to cover.
My honest take
I get it. After decades of mortgage payments, another big bill feels like an insult. Especially when prices are going through the roof.
But insurance is for the losses you can’t absorb, and for many retirees, losing the house is the biggest one there is.
Keep the policy. Shop it, trim it and raise the deductible. A paid-off house is a wonderful thing — just don’t bet it to save $250 a month.
Sources: 1. Bloomberg; 2. National Association of Insurance Commissioners; 3. Consumer Financial Protection Bureau; 4. KCUR; 5. NAIC via Indiana Department of Insurance; 6. FEMA
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