What is home insurance talking about when it refers to mortgage free? To be mortgage free is to not owe money on the property that is declared on the insurance policy.
Why would insurance care if you have mortgage or not? Statistics show that if a person owns their home mortgage free they are less likely to present claims for the insurance company to pay. The fact that the homeowner does not have a mortgage payment gives them more cash so they will likely pay small claims out of their own reserves. People who have more money usually have less stress so they are not as prone to making a mistake which leads to a claim. People who have more money also can keep a high level of maintenance on their property which helps to reduce claims.
Insurance Advice
If you have attained the status of being mortgage free then many of the insurance companies will give you a discount. If you are not receiving that discount now then you should check with your broker to see if it was missed. If it is not available from your current company then you might want to check for better rates elsewhere. Be sure to ask that you keep the same quality of coverage because this is a large asset you are protecting.
