<p>I recently had a most curious experience with my homeowner’s insurance company. We’ve insured with them for over 20 years. Never had a claim. Our renewal is coming up and they increased the premium by about 50%. When I protested, they said we are overcovered and would lower the premium by lowering the coverage. The coverage has been same for over 20 years including this year when they sent out the renewal. If you can swing the loss when it happens and don’t have a mortgage, do you still need a homeowner’s insurance? I really don’t see a point keeping it and dealing with a company that seems no longer trustworthy. This is supposed to be a squeaky clean, highly reputable company.</p>
<p>What if your home burns down? Can you afford that type of loss? I don’t know anyone who can. Anyone who owns a home should have H/O insurance, in my opinion. I think it would be very foolish not to do so. Why not check rates with another company if you think your company is overcharging?</p>
<p>You can swing the loss? </p>
<p>If the house burns to the ground you can replace the house and contents without affecting any of your other financial plans (like retirement or paying for college)? Then not having insurance might make sense.</p>
<p>If someone falls on your property and is paralyzed for life (and you’re liable) and you can cover the medical and lost earning bills without affecting any of your other financial plans? Then nor having insurance might make sense. Frankly this scenario scares Mom3ToGo and I more than the house burning down.</p>
<p>All insurance is a bad expected value bet … however in this case the potential downside risk is so big that Mom3ToGo and I choose to insure. I’d also add that if you’re in financial position to absorb these risks then the premiums are noise in your financial picture and protect you from a crazy liability case jury.</p>
<p>(cross posted with above)</p>
<p>It is a small house on a big lot. The insurance only covers construction costs. It amounts to a small fraction of the price of the house. I am sure a lot of people can swing that. Their new suggested covergage is less than 4 years of college tuition. Is that enough? If not, why are they suggesting it? If it is, why did they overcover for so many years? Liability will be a greater issue although from what i understand it is more likely due to a car accident than someone falling on your property and hurting.</p>
<p>why not explore their advice, look at lowering your coverage as appropriate, instead of thinking of doing without altogether?</p>
<p>awful that your rate went up 50% but I would absolutely always carry homeowner’s insurance, having lived through a hurricane that ripped our roof off, insurance covered all the damage minus a 2% deductible. just curious, why do you now see the company as untrustworthy, because of the increase, or because they told you that you were overcovered?</p>
<p>I’d look for another company. We always had the same kind of thought in the back of our minds, and we took the highest possible deductible. The liability was what scared us most, too, because we had a pool for a quite a few years. However, we had a storm with 100 mph+winds in 2009. Took off a lot of shingles (roof was 14 yrs old) and some siding on the back. Insurance adjuster came and estimated cost of new roof and re-siding the back of the house and gave us a check on the spot. We found a contractor who would do the whole job for more than the deductible less than the check. Because house was 15 yrs old, they couldn’t match the siding color and ended up having to reside the whole house (also covered by the insurance, no questions asked). That one claim was more than we ever paid in premiums. And we considered ourselves very fortunate because the roof would have had to be replaced in a couple of years at our expense and the difference between what we paid and what we received more than covered our deductible.</p>
<p>I was watching the news the other night and there was a story on the fires out west. They interviewed a couple whose house had burned to the ground and they were asked what they were going to do. They said they didn’t know as they didn’t have insurance. The mind boggles.</p>
<p>Our homeowner’s coverage is ~$800. Cheap price to pay for being able to sleep at night. I’d have the coverage if for no other reason than the liability coverage. I would not want to take the chance that someone on my property who gets injured could pull all that we’ve worked for right out from under our feet.</p>
<p>Our homeowners is about $500 per year.
We could probably get it lower by raising the deductible. Seems cheap to me.
(About 400K house with high liability coverage)</p>
<p>EB- in the 80s we had purchased and land and not yet begun construction when a huge wild fire burned through the region, one neighbor had built his own home and had no insurance. It burned and, while I did not know him before, after that happened he was angry and crazy!</p>
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In-state or out of state? :D</p>
<p>I know a guy who purchased a home in today’s market for around $50,000 (all cash) in Florida and felt h/o insurance was totally unjustifiable, especially given the high rate they would have charged him in hurricane country. In his case, I agreed.</p>
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<p>I stopped trusting the company since they lowered the coverage that was in place for over 20 years. And that it came after I protested their rate hike. How do I know I am insured enough? About the liability, the homeowner’s will cover only up to the max coverage not against the higher judgement if it came to that. Lower coverage means lower liability coverage, too.</p>
<p>NJres - That’s how I feel. In fact, their coverage is not much more than cash reserve I keep.</p>
<p>We have paid homeowner’s insurance for over thirty years. Maybe, a guess, over the years, $40,000. One claim we made a few years ago, got us back all those premiums and more. Well worth it.</p>
<p>Get some quotes from other companies. Just the idea that they’d raise it 50% in one shot seems like an issue to me. Is this USAA? There were some people on another thread talking about USAA suddenly raising their insurance considerably like this.</p>
<p>Do you have a mortgage on the house? If so, the mortgage company will likely require you to have insurance.</p>
<p>Outside of that, even though you can cover the loss yourself, the real point is not just whether you can cover it at all but whether you can cover it comfortably with negligible impact on your finances. If rebuilding the structure cost, for example, $250K, would that $250K be a highly significant cost to you? If you have multiple millions in the bank then it probably wouldn’t be a major impact to you but if you have $500K in the bank then it would be a major hit.</p>
<p>You need to consider that you could lose your house at any time - brush/forest fires, fireplace fires, electrical fires, kitchen fires, candle fires, lightning strikes, etc., floods, earthquakes (only covered with a special rider), etc.</p>
<p>On top of that consider theft coverage, coverage due to damage from break-ins, hail, falling trees, tornadoes, storms, vandalism, etc.</p>
<p>The answer lies in what you’re permitted to do by the lender if you have a mortgage, and then the simple math of risk vs reward equation. </p>
<p>I too am amazed at the people who have no insurance whatsoever on their homes when they’re obviously nice homes that are expensive to replace who are suddenly in dire straits when the brush fire destroyed their home. But people take risks like this all the time with insurance not just on their homes but also their cars (despite laws) and their health.</p>
<p>No mortgage, all paid off a while ago. If the house burns down, I would sell the land and move on. Not much for anyone to steal. Mostly sentimental stuff.</p>
<p>It is interesting to see so many people benefitted from having an insurance. If you think about it, you have to pay more than what you get on the average since insurance companies have to pay their staff and run the business in addition to paying people claims. We pay for the peace of mind knowing that we are covered. I don’t mind that. If you don’t trust the insurance company, I don’t know if I would get the peace of mind.</p>
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What we’re really paying for is protection against significant financial loss. We suffer some limited financial hit in paying the insurance premiums in order to protect ourselves from a potentially major financial loss that would have a significant impact on us.</p>
<p>If you feel that you don’t want to pay the insurance premiums and the financial hit if the house burns down wouldn’t be a big deal to you then maybe you should consider dropping the insurance for the structure. At the end of the day it’s just a product you’re buying and you need to decide if the value is worth it.</p>
<p>If you do decide to keep insurance though I think you should shop around to see what the competing rates are. Maybe you’ll find you can get equivalent insurance at a significantly lower cost and decide it’s worth covering the house for that lower cost even though you’re not willing to for the higher cost.</p>
<p>One other thing about homeowner’s insurance is to be sure you are adequately covered or you may be VERY disappointed when there is a major claim and it doesn’t cover nearly as much of the repairs/rebuilding as you expect.</p>
<p>Another thing is get an umbrella–one for $2 million cost us an extra $300, but it allows you to sleep at night in case someone happens to be paralyzed on your premises or who knows what? It also allows you to buy lower policy limits on your auto insurance – you just have to buy whatever the umbrella requires & the umbrella will add the extra protection.</p>
<p>One of the best things having good insurance coverage does is get you a good attorney paid for by the insurer if there are any claims filed against you for injuries caused on your property. I have noticed that those with the best umbrella policies tend to end up with the best attorneys in town.</p>
<p>For some homeowners in Florida who don’t have mortgages, it can make financial sense to not purchase homeowners insurance. Giant premiums and huge deductibles make it impossible to purchase for some and not wise financially for others who have high thresholds for risk tolerance. It might not make sense to pay $10,000/yr in premiums for a policy with a $20,000 deductible for a house with a replacement value of only $100,000…that’s expensive insurance. Homeowners can instead just buy a liability insurance policy for very little without property coverage if they wish to. The homeowners insurance market in Florida is a mess now, especially with the present Florida legislature in the pockets of the insurance industry.</p>
<p>[TALLAHASSEE:</a> Senior citizens go without homeowners insurance amid soaring premiums - Florida - MiamiHerald.com](<a href=“http://www.miamiherald.com/2012/08/11/2947464/senior-citizens-go-without-homeowners.html]TALLAHASSEE:”>http://www.miamiherald.com/2012/08/11/2947464/senior-citizens-go-without-homeowners.html)</p>
<p>Hey, our USAA premiums went way up this month, I am investigating other options. Anyone have any good suggestions? Over the last 30 years I have noticed that every so often USAAs premiums go very high for a few years.</p>
<p>In HI, it makes sense to many to pay the $1500 premium to cover $400K replacement cost of homes for the year, including property damage & any liability coverage. We have to pay extra separately for hurricane insurance and flood insurance! Of course premiums are based on risks and vary greatly among states. Hurricane coverage comes with 2-10% deductile, I believe. </p>
<p>Recently bought USAA auto insurance, for D. It was quite reasonable and among the lowest quotes we received for the coverage. No other type of USAA insurance is offered to us in HI as children of a veteran.</p>