According to the U.S. Census Bureau, there were more than 76 million owner-occupied homes in the U.S. in 2009, of which more than 24 million were owned free and clear of any mortgage. That means that more than 30 percent of American homeowners are not required to carry homeowner’s insurance on their property, which proves financially dangerous for individuals who would rather save cash on premiums than protect one of their biggest investments.

In Texas, for example, natural disasters are prevalent. Although the state does not see many earthquakes, it is home to hundreds of hailstorms every year, as well as tornadoes, high winds, flash flooding, hurricanes, and even ice and snow. Homeowner’s insurance is vital to protecting a Texas homeowner from expensive repairs that occur during these common events.

Furthermore, cancelling a homeowner’s insurance policy just because your home is paid off doesn’t mean that the extra money you have from not paying mortgage payments will be enough to cover you in the event your home is burglarized or burns in a fire. For example, in 2011, drought-induced wildfires in Texas burned more than 1,300 homes in the Austin area alone – leaving thousands of people without a home or their personal possessions. Without homeowner’s insurance, rebuilding and replacing a property and its contents could be financially draining, if not impossible.

Options for Lowering Premiums

Rather than cancel your insurance policy after paying off your mortgage, consider shopping around for homeowner’s coverage that provides you with the protection you need to replace your home and its contents without expending your budget. Ask your insurer what types of discounts are available. Also, consider raising your deductible for lower premiums.

Remember, your home is more than a place to live. A paid off property provides financial security and an inheritance for children and loved ones. Never leave it vulnerable to the unexpected. Keep it insured as long as you own it.

The amount of coverage you select for your homeowner’s insurance isn’t the only factor that determines your policy rates. Texas home insurers take careful consideration of the types of building materials used to construct your home, and how they may contribute to the likliehood that you will need to file a claim in the future. Some insurers may charge more for specific building materials, such as wood, while others may overlook building materials when pricing a policy.

For example, in Texas, termites are much more prevalent than in other parts of the country due to high humidity and warm weather. Swarms of termites can infest properties, eating through as much as a foot of wood in a matter of weeks. Untreated and unnoticed, termites can destroy the structure of log homes, pier and beam homes and other houses with a lot of wood exterior.

Texas is also prone to strong storms, and has been hit with hurricanes in the past. Insurers prefer masonry exteriors, such as stone, brick and stucco to withstand gusty winds. Similarly, the building materials used to construct a home’s roof also contributes to homeowner’s insurance policy rates. Metal roofs provide the most reliability and typically need to be replace less often than traditional composite roofs. Wood roofs are the least preferred, as they are prone to leaking and more frequent replacement, which could lead to a greater number of insurance claims over time.

Home insurers may also frown upon particularly expensive building materials, as replacing them could prove costly if your home is insured for replacement value, rather than market value. In other words, suppose you choose natural stone over brick, and consumer demand and supply shortage drives up the cost of the stone in the future. If you are insured for replacement value, your insurer will have to pay for the stone building materials, regardless of how much it costs.

If your home is constructed of particularly expensive or notoriously unsturdy materials, be sure to compare insurance rates between multiple insurers before purchasing a policy. Depending on your home’s materials, you may find a Texas insurer who will charge significantly less than others.