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7 Times It Can Make Sense To Go Without Home Insurance

Insurance is all about assessing risk, including your tolerance for it.

By Heather Bien

Edited by Laura Ratliff

Updated July 2, 2025

Most people assume that when they buy a house, they'll purchase homeowner's insurance — but with rising home insurance costs, more and more homeowners are weighing their risk tolerance and taking a chance by not insuring their homes.

For some, it's often required with their mortgage, and they don't give it a second thought beyond finding the best rate. But more people are realizing that buying insurance isn't always the best money move as a homeowner, and surprisingly, there are actually a few situations where insurance just doesn't make financial sense.

Here are seven situations where it could make sense to go without home insurance.

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1. Fully paid-off home

While most states do not require homeowners to have insurance, lenders do.

That means the easiest way to skirt around having insurance is to have a home where you do not need to go through a lender. If you own your property outright, you can choose entirely on your own whether you want to have homeowners insurance or not.

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2. Low-risk area

If you live in an area historically hit by hurricanes, tornadoes, or other natural disasters, you shouldn't even think about skipping homeowners insurance. And, if you live in an area prone to flooding or earthquakes, you may even need additional insurance.

But if you live in a low-risk area and feel your odds of a disaster are low, you may be tempted to skip it.

3. High emergency fund

Homeowners insurance premiums typically aren't expensive, but if you have more savings than you know what to do with, you might decide to pull from your emergency fund if disaster did strike.

This would give you more freedom in repairing your home, less stress in dealing with insurance, and the assurance that your premium will never go up after a claim.

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4. Older home with low value

For homes with a low property value, insuring the structure might not be worth it. Your annual cost to insure the home may outweigh the actual value of the house and any potential repairs, and you're better off using that money to save for your next, newer property.

5. Limited coverage needs

Your standard homeowners insurance might seem excessive if you're an extreme minimalist. In the event of a disaster, all you'll really need to replace is the structure itself and some worldly possessions.

If personal property is less of an issue, it might make sense to skip the insurance and put your money into easily accessible investments where it can grow.

6. Second home

For second homes, vacation homes, and similar properties where you need less liability and property insurance, you can skip the homeowners insurance and look at a dwelling fire policy instead. This can protect you in certain disasters, but comes without the extensive coverage of traditional homeowners insurance.

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7. No visitors

If you feel confident that there will not be visitors to your home, whether it's family, friends, or people working on your house, you don't have to worry about the liability issue that others are concerned with. One person slipping on your sidewalk, and you might wish you had insurance.

Bottom line

If your top priority is to protect your wealth, then foregoing insurance is likely not the right move.

Instead, it's worth paying the monthly premium in the case of a major — and costly — emergency. Sometimes, spending money is the best way to save money in the long term.

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Author Details

Heather Bien

Heather Bien is a FinanceBuzz and freelance writer covering personal finance and budgeting and how those relate to life, travel, entertaining, and more. With bylines that include The Spruce, Apartment Therapy, and mindbodygreen, she's covered everything from tax tips for freelancers to budgeting hacks to how to get the highest ROI out of your home renovations.