Homeowners insurance: keep or drop?

[ponyo]

When does it makes sense to drop homeowners insurance and self-insure? Never?

I'm tired of paying yearly premium for something I'll likely never use.

 

[SunnyD]

Drop it now, duh.

Have fun watching your house burn down before the end of the year!

Do you have a mortgage or is your home paid off? If the former, you're pretty much required to carry insurance by contract.

 

[gorcorps]

Depends, if something happens are you prepared to drop thousands of dollars with no notice at all?

Also, what ^ said about mortgage. You think the bank will let you get away with not insuring something you haven't paid for yet? ha!

 

[waggy]

Drop it now, duh.

Have fun watching your house burn down before the end of the year!

drop it. i want to see the thread where you cry about it latter. Like if t he house burns down or if you have a mortgage company fucking you up the ass over it.

 

[WaTaGuMp]

MINO?

 

[Uppsala9496]

Never.
Colleague of mine was had his laundry going non-stop when his daughter was getting ready to go back to school. The tossed the final load into the dryer and ran to the mall to get something. 10 minutes into their trip the neighbor called saying black smoke was pouring out of their windows. Dryer caught fire and trashed the basement.

That happened in August and he still isn't back in his home. A simple service such as boarding up the windows around the house was $2,000. Can't imagine not having insurance to cover the cost.

 

[DrPizza]

Self-insure? You have liquid assets greater than or equal to the value of the house? Home insurance is so cheap, I don't know why you wouldn't want it.

 

[SunnyD]

Never.
Colleague of mine was had his laundry going non-stop when his daughter was getting ready to go back to school. The tossed the final load into the dryer and ran to the mall to get something. 10 minutes into their trip the neighbor called saying black smoke was pouring out of their windows. Dryer caught fire and trashed the basement.

That happened in August and he still isn't back in his home. A simple service such as boarding up the windows around the house was $2,000. Can't imagine not having insurance to cover the cost.

And it's not even just the costs of dealing with things like repair and mitigation costs of the DWELLING that you're covering, but also things like:

- Liability (injuries that happen on your premises, legal fees, etc)
- Theft replacement
- Damage replacement (Non-structural items damaged, caused by claim event)
- Temporary housing (while your house is being made livable if possible)

Homeowners Insurance has so many additional riders these days that it's ridiculous what it covers in addition to just the physical dwelling. Hell, mine even covers my credit cards on top of what my credit card companies would cover in the event of theft, which is pretty much standard now.

It would take me about 3 lifetimes worth of premiums to come close to paying out more than what my house would be worth in premium payments. It would take one tornado and a blink of an eye (not unlikely down here) to rip through and have my insurance company writing me a check for more than I paid for my house. Why the hell would someone NOT take that deal?

 

[Uppsala9496]

And homeowners insurance is one of the cheapest ones.
Compare your homeowners cost versus your auto. Ridiculous. Frequency versus severity issue of course.

 

[ponyo]

Self-insure? You have liquid assets greater than or equal to the value of the house? Home insurance is so cheap, I don't know why you wouldn't want it.

Yes, I have enough liquid assets to pay for equal replacement. Total loss is the only thing that would really hurt. Everything else, the high deductible prevents me from ever filling a claim.

 

[rh71]

it costs us $100/mo. for a dwelling cost of over $500k. I think it's more than worth it regardless of whether I have the money myself for total replacement. If it's too much, look into combining with your auto. That's how I have mine so low with Liberty Mutual. That's even cheaper than most medical insurance.

 

[Uppsala9496]

What's your premium for a year? Couple hundred dollars? Seems like a better use of your money than the possibility of liquifying all of your assets.

Oh and what happens if a fire starts at your house and then spreads to the neighbors? I think you might be on the hook for that (been a few years since I've read anything regarding fire insurance).

 

[MrDudeMan]

Do you have a mortgage?

 

[mizzou]

The only insurance not worthwhile is the kind covering consumer electronics or items of insignificant value and risk.

 

[DaveSimmons]

Homeowner's and renter's are worth it not just for the material costs, but also for the liability insurance. My State Farm renter's insurance is around $150 a year and comes with $100K of coverage for that.

Fark has a story today about a firefighter suing a homeowner after he slipped and fell on the owner's property. Your mailman or a house guest might do the same someday.

 

[Markbnj]

It's absolutely worth keeping. I paid premiums for ten years and then one of my kids tried to flush something down the toilet that wouldn't go, and at the same time the float jammed due to mineral build-up on the riser. The result cost $22k to repair. I paid a deductible, the amount of which I forget, but it was around $1000.

 

[EagleKeeper]

drop it. i want to see the thread where you cry about it latter. Like if t he house burns down or if you have a mortgage company fucking you up the ass over it.

Mortgage company will obtain insurance for you at their rates and tack it onto the premiums.

I had a company try to do that for flood insurance. Feds wanted $125/yr; company went out and purchased a policy for me at $1500/yr.

They ignored the fact that Flood Zoning was changed and I no longer was required by law to carry flood insurance.

The OP better look at his loan documents to see if he is required to carry insurance.

And hope that no one ever smokes in the place; all water heaters are always up to snuff; no one clogs a toilet or drain. No accidents at all on the property; no tree limbs coming down, etc

 

[EagleKeeper]

Yes, I have enough liquid assets to pay for equal replacement. Total loss is the only thing that would really hurt. Everything else, the high deductible prevents me from ever filling a claim.

You are aware that replacement costs is not the same as the value?
And while the place is being replaced; you have to live elsewhere.
And then you have the furnishings that also need replacement - usually 20-30% of the cost.

If you have the liquid assets and no mortgage; go for it; you feel you have the money.

If you have the mortgage; then pay it off and go bare. Just make sure you know what the actual overall costs can be.

A simple water damage from a backup sewage line can run $5-20K.

Is your deductible that high?

 

[TechBoyJK]

Yes, I have enough liquid assets to pay for equal replacement. Total loss is the only thing that would really hurt. Everything else, the high deductible prevents me from ever filling a claim.

If you have enough liquid assets to self insure, WHY IN THE WORLD wouldn't you pay for homeowner's insurance? It'll be far cheaper to pay that, then pay out of pocket for anything major.

 

[TwiceOver]

So you have enough liquid assets that if a tree falls and kills someone that you could cover the incoming law suit?

If so, more power to ya, don't pay!

 

[ponyo]

Mortgage company will obtain insurance for you at their rates and tack it onto the premiums.

I had a company try to do that for flood insurance. Feds wanted $125/yr; company went out and purchased a policy for me at $1500/yr.

They ignored the fact that Flood Zoning was changed and I no longer was required by law to carry flood insurance.

The OP better look at his loan documents to see if he is required to carry insurance.

And hope that no one ever smokes in the place; all water heaters are always up to snuff; no one clogs a toilet or drain. No accidents at all on the property; no tree limbs coming down, etc

I've been mortgage free for about 5 years now. Like I said, the only thing that would really hurt is major or total loss. I don't consider small damages from water heater, plumbing, or small tree damage to be anything major. I had all those happen and none were worth filing.

I drop down to liability only on my autos whenever the value drops below $10k.

 

[TechBoyJK]

I've been mortgage free for about 5 years now. Like I said, the only thing that would really hurt is major or total loss. I don't consider small damages from water heater, plumbing, or small tree damage to be anything major. I had all those happen and none were worth filing.

I drop down to liability only on my autos whenever the value drops below $10k.

I'd personally want it just so I didn't have to pay for anything major. Like a tornado or something.

Plus, liability to damage to others is another key component of why I'd keep the insurance.

 

[Midwayman]

I'd be worried every time I went away for a couple days. However its not just fire, its the liability of someone hurting themselves on your property and sueing you. I know I carry 1mil in liability 'cause its a trivial cost.

 

[imagoon]

Considering I make more investing my liquid assets in to something more "semi liquid" than I pay for annual home owner insurance, I keep my home owners insurance. Considering if the local kid runs in to your yard, trips on your rock sculpture and the parents try to sue you for 2million, $380 a year seems like pretty comfortable blanket.

 

[kranky]

Dropping homeowners insurance and buying a liability-only policy makes sense for certain people. The kind of people who own a $300K home in a hurricane-prone and high-flood risk area, their insurance runs $5,000 a year, and they have two million dollars in liquid assets.

When a total loss wouldn't even cause you the slightest financial problem, and insurance is too expensive with respect to the home value, then maybe.