How a HECM could save uninsured homeowners from disaster

uninsured homeowners reverse mortgage

The casino is a suitable place to roll the dice and take your chances- win or lose. However, gambling with the security of your largest asset and risking the roof over your head is not.

Survey reveals more homeowners are uninsured

The Insurance Information Institute reports that 5% more homeowners have not purchased homeowners insurance than just two years ago. That’s not surprising considering skyrocketing premiums in several states, most notably California and Florida.

Are most of these homeowners well off with substantial assets to self-insure their homes? Not necessarily. The Institute’s survey showed that half of those who chose to forego insurance on their home have an annual income below $40,000. While wealthy individuals may have the ability to self-insure, most Americans pool their risk with an insurance company that has the financial capacity to absorb the expense of repairing or rebuilding a home.

A risky gamble

As we know, if you have a mortgage on your home you are required to carry a homeowners insurance policy. The lender must protect the collateral that secures the loan. In a recent column in David Stevens, a former head of the Federal Housing Administration and the Mortgage Bankers Association said the Insurance Information Institute ‘survey suggests many of these homeowners may be retirees with a paid-off home who are living on a fixed income.

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1 comment

John Hastings September 5, 2023 at 9:06 am

Excellent point! Losing a home due to any kind of disaster without insurance is so unnecessary. And when a HECM can pay property taxes as well, then that’s a huge bonus.


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