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I live in Texas and it seems like our Home Owner's Insurance is doubling every year.
It is way out of control.
For those with no mortgage Insurance requirement, how many here skip on home owner's insurance and place the money they would have paid the insurance company into a Self Insured emergency fund?
Yes, I understand the risk but my question is..what is the ACTUAL STATISTICAL PROBABILITY that the average Home owner Insurance holder will file a claim EQUAL TO or GREATER than the amount the Home Owner Insurance charges, per year?
For example, if your premium is $6k a year and instead of paying the insurance company each year, you pay yourself that premium, after 10 years you'd have ($6k x 10)= $60k + ANY GROWTH if it was in a money market account.
If the ACTUAL STATISTICAL PROBABILITY IS say less than 5%..you most likely will not use YOUR insurance that year...and on top of that what is the ACTUAL STATISTICAL PROBABILITY it is a LARGE payout and what additional Legal fees would you have to pay to access the money the Insurance Company owes YOU?
How about giving actual numbers 2021, 2022, 2023 and 2024. We lived several years in Texas before moving to Oklahoma and our insurance went up but within reason.
60k may not replace a roof.
By payout do you mean funds being held until you leave the insurance? What monies will an insura nce owe you that you need legal representation for?
Insurance is to protect you against catastrophic expenses that could ruin you financially. It's not for paying $4000 repair bills. If you pay for such low deductibles that you can use it that way, you're misusing the tool.
You want liability, and replacement of the structure and possessions, and a high deductible. The single biggest thing for me is liability.
If a $4000 repair bill will ruin you, you have no business owning a house. Insurance is for that million dollar liability lawsuit, or for the $400,000 it takes to rebuild the house if it burns to the ground. Those are the kinds of things that can ruin a family. The $4k repair bill is an inconvenience, to be sure; you may well have to borrow the money; but it's not going to eat up all your assets and leave you with garnished paychecks the rest of your life like a million dollar liability judgement could.
And that is exactly why we would never self-insure. How will you rebuild if your house burns down? $60K won't get you much house...
I believe it to be necessary for catastrophe loss or major sudden accidental loss.
Is your homeowners premium really $6k a year?
It does beg the question though...We all self insure to a point.
Can one get a policy with a $20K or $50K deductible? I recently had a tree fall on my roof and I had to get a tree service with a crane out to get it off and tarp the area and will need a new roof. Total claim will be about $20K all said and done.
I suppose it depends on what your particular risks are. If you live in a benign area that doesn't have tornadoes, thunderstorms, wild fires, floods, hurricanes, etc., you might be OK. Otherwise, you need homeowners. And toss in someone getting injured on your property, and you really need it.
I can't believe nobody else has brought up protecting other assets with an umbrella. Some people don't worry about things like that but honestly, it isn't just about rebuilding a house. Run into a school bus and kill a couple of kids; you'll wish you had an umbrella policy.
In the past 15 years we’ve replaced two roofs due to hail damage. I could have probably gotten a third replacement on another storm if I had pushed it.
I’ll stick with my homeowners insurance, thank you.
I can't believe nobody else has brought up protecting other assets with an umbrella. Some people don't worry about things like that but honestly, it isn't just about rebuilding a house. Run into a school bus and kill a couple of kids; you'll wish you had an umbrella policy.
Umbrella was mentioned early on, in post #3 and you mentioned it in #12!
I live in Texas and it seems like our Home Owner's Insurance is doubling every year.
It is way out of control.
For those with no mortgage Insurance requirement, how many here skip on home owner's insurance and place the money they would have paid the insurance company into a Self Insured emergency fund?
Yes, I understand the risk but my question is..what is the ACTUAL STATISTICAL PROBABILITY that the average Home owner Insurance holder will file a claim EQUAL TO or GREATER than the amount the Home Owner Insurance charges, per year?
For example, if your premium is $6k a year and instead of paying the insurance company each year, you pay yourself that premium, after 10 years you'd have ($6k x 10)= $60k + ANY GROWTH if it was in a money market account.
If the ACTUAL STATISTICAL PROBABILITY IS say less than 5%..you most likely will not use YOUR insurance that year...and on top of that what is the ACTUAL STATISTICAL PROBABILITY it is a LARGE payout and what additional Legal fees would you have to pay to access the money the Insurance Company owes YOU?
liability insurance while important can be a minefield when it comes to what is covered .
things like shooting someone even in self defense and being criminally cleared and being sued are not covered .
when we had our house in pa in the hoa we had inquired if the civilian patrol chased some kids on rtv’s or snow mobiles out of the development and one was hurt , what happens. .
the answer surprised us .
if the hoa insurance didn’t cover all of an award it would be passed to homeowners .
no surprise there , but the surprise was our liability policy wouldn’t cover it .
they only cover actions by the insured not third party that get you sued .
i called geico and they confirmed they wouldn’t cover 3rd party induced liability in hoa’s , co-op or condos
I can't believe nobody else has brought up protecting other assets with an umbrella. Some people don't worry about things like that but honestly, it isn't just about rebuilding a house. Run into a school bus and kill a couple of kids; you'll wish you had an umbrella policy.
And in almost every post I've made on this subject I've listed liability as a key reason for homeowners insurance.
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