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An umbrella insurance is cheap compared to auto or home insurance. Once you have assets to protect, it's a good idea to protect yourself as much as you can.
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?
True..I'd actually encourage anyone to look into where Insurance companies invest YOUR money once they pass the period of having to pay out your claims.
GEICO is notorious for investing into TV and Movie projects....making Warren Buffet even richer than he already is.
Ok, so the agenda here is to bash the insurance companies. Thanks for clarifying.
Is there an elasticity point where many Americans start opting out?
Many?
Many will not opt out.
Many cannot afford to not carry insurance, especially those who cannot even afford repairs. Plus many still carry mortgages and are required to carry insurance.
Also, people with umbrella policies need homeowner insurance for those policies (I know we do).
NO..the question is at what point does ever increasing insurance rates become unfeasible for American families due to the actual risk %.
Is there an elasticity point where many Americans start opting out?
Maybe those not up to date on replacement costs and liability and not being able to add 1 +1 will. Ask anyone who had a serious claim. A poster in this thread mentioned 20k for a roof in Raleigh NC. Those numbers are based on locality, roof type and size. You have not yet posted actual numbers to substantiate your claim of unreasonable policy increases. Just bashing insurance? Sounds like it.
Maybe those not up to date on replacement costs and liability and not being able to add 1 +1 will. Ask anyone who had a serious claim. A poster in this thread mentioned 20k for a roof in Raleigh NC. Those numbers are based on locality, roof type and size. You have not yet posted actual numbers to substantiate your claim of unreasonable policy increases. Just bashing insurance? Sounds like it.
I've made one "serious" damage claim on a homeowner's policy. In simple terms when all was said and done, the cost to repair was about double what I'd paid in premiums over the 16 years I owned the house.
I think you are going to have to go to several brokers and ask them how many claims they have filed out of how many policies they have. I would ask about type and also dollar amount.
Liability insurance would be my main concern if I was self insuring.
This is the problem with self insuring. You could surely set aside an amount to self insure the rebuilding of your home, and from a financial point of view it probably makes sense.
But liability is another story entirely. An injury on your property could result in a lawsuit for hundreds of thousands if not over a million dollars.
You can purchase standalone personal liability insurance but not sure of the cost.
This is the problem with self insuring. You could surely set aside an amount to self insure the rebuilding of your home, and from a financial point of view it probably makes sense.
But liability is another story entirely. An injury on your property could result in a lawsuit for hundreds of thousands if not over a million dollars.
You can purchase standalone personal liability insurance but not sure of the cost.
I've got a 2m policy for $218. I did have to increase my auto and home policies, but it wasn't a huge difference.
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