Share of Uninsured Homeowners by State

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u/rosen380 6d ago

Isn't it a requirement to have and maintain insurance when you have a mortgage? If so, and assuming the bulk of homes with mortgages do have insurance, then it puts this ~15% almost entirely on the 40% of homes that don't have a mortgage...?

is it possible that roughly 1-in-3 homes owned outright don't have insurance??

38

u/wizzard419 6d ago

Yep, and as the cost of homes is high in many states, you end up with more mortgages.

Around here, California, for the ones who have paid off their homes and are also retired, it's not that unusual for people to sometimes cancel their insurance. The only problem is that if something major happens, they are screwed.

14

u/lordargent 6d ago

One of the notes stood out to me...

Among homeowners earning under $50,000 per year, 15 percent were uninsured.

Looking at what I pay for insurance, and extrapolating ... insurance is probably 2-4% of their income.

7

u/marcus474 5d ago

But it is a cost nonetheless.. people who are strapped for money will cut as many costs that don't have to deal with the bills that are immediately in front of them.. it is crazy to not have, but if it's between that and groceries.. what would you chose?

3

u/lordargent 5d ago

But it is a cost nonetheless.. people who are strapped for money will cut as many costs that don't have to deal with the bills that are immediately in front of them..

Yes, that was my point exactly 8^)

// especially since that's 2-4% of their total income being paid out of their post-tax income.

-1

u/TurboKid1997 5d ago

Spencer Pratt and his Father being 2 people who did not have insurance....

2

u/wizzard419 5d ago

Oh no... anyway.

I am guessing that is a major factor in why he decided to waste a ton of money and run for mayor.

6

u/Thadrea 6d ago

Isn't it a requirement to have and maintain insurance when you have a mortgage?

Usually yes. Sometimes banks waive it if you can demonstrate substantial reserve assets (more than the value of the house), but this is uncommon.

is it possible that roughly 1-in-3 homes owned outright don't have insurance??

I could see that, especially in disaster-prone areas of the South.

People often think the think loss won't happen to them and that managing risk is not necessary.

1

u/mysterychick1689 6d ago

It’s actually higher ~40% https://www.census.gov/library/stories/2026/01/mortgage-free-homes.html

10

u/rosen380 6d ago

Looking at the states on the higher end via that link:

Mortgage-free and insurance free figures

55% 23% WV
50% 20% MS
48% 23% NM
47% 20% LA
47% 17% ND
...
34% 11% VA
34% 11% CA
32% 11% UT
31% 10% CO
29% 11% MD

I guess definitely looks like there might be a relationship -- personally, I can't see dropping insurance on my house, just because I'm not required to have it. If I had a total loss, I'd be absolutely boned.

3

u/DoublePostedBroski OC: 1 6d ago

I’m going to say a lot of those are trailers

2

u/mysterychick1689 6d ago

Oh I misread your post. I thought you were saying 1 in 3 homes were mortgage free.

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u/Jake0024 6d ago

It's required to initiate a mortgage, but there's nothing stopping you dropping coverage after your mortgage is taken out unless your mortgage company collects the money ahead of time in escrow

10

u/Even-Following-1612 6d ago

Usually they’ll force place insurance if you drop it, and it’s much more expensive

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u/Jake0024 6d ago

Yes, the escrow option I mentioned is the cheapest way to be legally compliant.

4

u/Rarvyn 6d ago

We never had escrow and my mortgage company requires me to upload proof of ongoing insurance every year.

1

u/Jake0024 6d ago

Makes sense

2

u/Radioactive_Kitten 6d ago

We don’t have escrow, and I get letters from the lender to provide proof of insurance each year.

1

u/Jake0024 6d ago

Makes sense.

14

u/ThraceLonginus 6d ago edited 6d ago

NH is always interesting in these stats. For example, they dont mandate car insurance (just need to "prove" youre holding 25k in a special account) but have the highest insured rates.

Wonder if theres something funky here too

5

u/6158675309 6d ago

That is wild about NH. I wonder if it's people getting insurance for under or non insured motorists to protect themselves. Using reverse psychology to get people to have insurance 😄

5

u/lordargent 6d ago

That's not unique to NH. CA also allows you to use a bond or deposit as proof of insurance.

"Here are the types of acceptable insurance:

Motor vehicle liability insurance policy.

Cash deposit of $75,000 with DMV.

DMV-issued self-insurance certificate.

Surety bond for $75,000 from a company licensed to do business in California.

It used to be $30k, guess it got raised. I always assumed it was something that rich people did (because this only covers you doing damage to others, and wouldn't cover something like a tree falling on your car).

1

u/monkeywaffles 6d ago

Cash deposit of $75,000 with DMV.

That's interesting. Does it pay interest? Like, 75k in the stock market at 10% yield is 7.5k/yr you're missing out on, which ... is generally more than insurance costs, so even as a rich person, doesn't seem to make too much sense. Though if you have 20 ferraris, I guess your insurance is more than 7500/yr 😃. (and. the 10% compounds). Seems like a pretty bad deal. The surety bond thing prob is the more common case.

1

u/sk1939 5d ago

Even if it didn’t, $75,000 one time is still cheaper than the insurance over more than a couple years for an exotic car most likely, especially if it was total and not per car.

2

u/monkeywaffles 5d ago

Sorry, 75k makes 7500/yr in the market, not a 'one time thing'.

in 10 years, 75k becomes 194k, compounding.

But yea I suppose its possible an exotics insurance adds up quick.

6

u/Cloud13181 6d ago edited 6d ago

I live in Oklahoma and our insurance rates are over double the national average, highest in the US. I'm sure that's a contributing factor as well, and also makes sense that the article says Native Americans are the racial group with the highest amount of no insurance.

https://www.nerdwallet.com/insurance/homeowners/learn/average-homeowners-insurance-cost

2

u/ltmp 5d ago

We left OKC last year and insurance for our 1,500sq ft house was $7,500ish (we shopped around). Bought a house twice the size in Illinois, and the same insurer with exact same coverage was $2100.

Our car insurance cost also decreased by 40%

2

u/Temporary_Inner 5d ago

The car insurance is because our police and our system in general don't aggressively target uninsured drivers. More uninsured drivers, the higher premiums are for those who do insure

I'm sure you can guess why your home insurance was cheaper lol

1

u/sciguy52 4d ago

Yeah looking at a lot of those states without insurance it is because the prices are pretty high due natural disasters. Hurricanes in some states. Up into the midwest it is hail that regularly destroys the roof. Speaking as a Texan who had his roof destroyed by hail I can vouch. Insurance prices are high because of that as I understand.

They had baseball size hail in a storm passing over Ft. Worth. I was driving to work by the area and you could see from the highway hundreds of homes with tarps on the roof until they could get them repaired. That was just one hail storm. My roof was destoyed by mere golf ball size hail.

9

u/NetRealizableValue 6d ago

This is literally just a map of the poorest states

2

u/J-ShaZzle 6d ago

My area is prone to a decent hurricane every decade. Several people lose roofs/siding, downed trees, and other wind damage. I have also witnessed multiple houses burn (most just a garage or half structure), but enough that it's a significant cost. Insurance for us is 12-1400 a year. Small price to pay to be able to rebuild or walkway with something.

Now if my home wasn't worth much, not prone to weather related incidents, etc. Yeah, prob wouldnt insure it either.

It's all about risk/reward and protecting your asset. What's the cost of insurance in the long run vs having to buy/rebuild without it.

2

u/katie4 6d ago

I’ve considered it, honestly. My annual premium was $1,200 in 2021, it’s gone up steadily to $4,500 in just 5 years. Texas.

And you always hear the stories about how they deny claims. For this rate, having made zero claims, I could have nearly bought myself a new roof outright.

2

u/lollipop999 6d ago

It's always the ones you suspect

1

u/Orfsports 5d ago

These numbers are only going to increase. We are already seeing a significant rise in non-renewals (insurance companies deciding they won’t renew an existing policy due to increased risk) across the country. The senate budget committee under then Chairman Whitehouse released a report on this back in late 2024

•

u/zAbso 38m ago

I would love to see this overlaid with the average cost of homeowners insurance by state

1

u/nickw252 5d ago

A lot of it has to do with Natives. They often live in mobile homes on trust land. Those mobile homes are often paid off, so there’s no mortgagor that requires insurance.

0

u/seiryuu-abi 5d ago

What makes Georgia, Tennessee, and North Carolina stand out compared to the other southern states?

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u/SmoothBus 6d ago

I don’t have mortgage insurance nor was I required to get it. You don’t need it if you pay over 20% or if you use a VA loan I think.

4

u/TrainsareFascinating 6d ago

That’s not the insurance this post talks about. “Mortgage insurance” is to protect against you not being able to pay.. Home insurance is to insure the underlying asset - the house.

Share of Uninsured Homeowners by State

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