Homeowners Insurance

My house is paid off and I am considering dropping my homeowners insurance. I've had insurance for over 30 years and only made 1 minor claim 30 years ago. The only reason I'm considering dropping the insurance is because the cost relative to the coverage seems high. I'm paying $1033. for 57K worth of insurance on my mobile home with a 1K deductible.
If I were to have a total loss, I could afford to replace it or move. I had a reasonably priced policy until Nationwide decided to leave the market 2 years ago.
Your thoughts are appreciated.

Ask VivianLynne why she likes her homeowner's insurance. Last time I checked with her, I think her insurance company had paid out OVER $60,000 to rebuild and refurnish her Pocono's house of less than 870 sq ft.

I think her furnishings are up to $20,000 --- and that is without a heating system, central air, septic --- the vandals did burn out her well pump for $1480 (4 foot deeper well would have been around $5000).

And VivianLynne started off by paying for a new roof - tearoff and 30 year shingles.

And that also includes the liability policy. Her deductible is $500.

If someone slipped on you front step, do you have enough to cover the lawsuit? Last I checked, lawyers weren't cheap. What about the contents of your home? What would it cost to replace everything you own?

artringwald said:

If someone slipped on you front step, do you have enough to cover the lawsuit? Last I checked, lawyers weren't cheap. What about the contents of your home? What would it cost to replace everything you own?

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The liability if someone is hurt on your property is definitely something to consider. Are there other policies that would cover that?

Rather than dropping the policy, I would look for something with a higher deductible. I agree- I would be most concerned about liability. That is why I added an umbrella policy to my homeowners insurance.

bellesgirl said:

Rather than dropping the policy, I would look for something with a higher deductible.

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That would be my approach as well.

Did you shop around? I had the same insurance co for 20 years, thought I was getting a good deal, until I started checking around. Found another co for $700 cheaper. Also, you live in SC, remember it's hurricane season.

We live "in the woods"

artringwald said:

If someone slipped on you front step, do you have enough to cover the lawsuit? Last I checked, lawyers weren't cheap. What about the contents of your home? What would it cost to replace everything you own?

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We live "in the woods" on a 28 acre property off a dirt road. We have never had a visitor other then friends & family. I know friends & family could also sue, but I don't think it would be very likely. We don't own anything of any real value that could not be replaced for a few thousand dollars.

JPD said:

Did you shop around? I had the same insurance co for 20 years, thought I was getting a good deal, until I started checking around. Found another co for $700 cheaper. Also, you live in SC, remember it's hurricane season.

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Yes, there are only a few companies that cover Mobile Homes.....

If you are only paying $1033 PER YEAR there is no way I would cancel my homeowner's insurance.

If your house burned down and you had to replace it ($60,000) and all the contents, even if that is only $10,000. you have $70k extra dollars in your savings that you are willing to pay to replace your house and contents?

If someone got hurt on your property and had to have a $40,000 back surgery do you have that in your savings account to cover it?

If so, then cancel. No problem. But for less than $100 per month you have coverage. What it would cost you to replace your house and contents is about 70 years worth of insurance premiums.

I think canceling a policy just because your house is paid off is not the smart move.

That would be like canceling your car insurance because it is paid off. Unless you have an extra $20k in the bank to pay for your own new car, then you still need to keep that insurance.

I don't care if I had to pay several hundred per month I would never cancel my homeowner's insurance.

Anything can happen. One of your friends or relatives could come over and slip and fall and seriously injure themselves and you would be responsible for the medical bills and anything they might sue you for. Just because they are friends and family doesn't mean accidents can't happen. You could have some random Jehovah's witness come to your door on Saturday morning and once they step onto your porch they hurt themselves. I would never rule out personal injury or a law suit because of your lack of visitors.

I would never cancel. Raise your deductible. But unless you are paying $1033 PER MONTH then it is pennies compared to the coverage you get.

bellesgirl said:

Rather than dropping the policy, I would look for something with a higher deductible. I agree- I would be most concerned about liability. That is why I added an umbrella policy to my homeowners insurance.

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Just to add my two cents, I agree with this approach.

Instead of not having a home owner insurance, you should shop around. My homeowner insurance has a 5k deductible and my homeowner insurance costs only 0.15% of my home value and yours costs 1.8%. I also have an umbrella policy that is relatively cheap.

ttt said:

We live "in the woods" on a 28 acre property off a dirt road. We have never had a visitor other then friends & family. I know friends & family could also sue, but I don't think it would be very likely. We don't own anything of any real value that could not be replaced for a few thousand dollars.

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I need to call my MH insurer to see if they can also insure the home I'll be buying in GCB, so I'll ask them if they can get a good quote to my friend in Cross. I'll call them tomorrow...so just sit tight with your current policy until you can get other quotes.

If someone is injured on your property, their insurance co. could force them to sue you. I've heard of that happening.

Put me in the higher deductible camp as well. Might be just flushing the money, but if you DO have a claim you can file on it, and raising the deductible should reduce the premium by a bunch.

I would check into the higher deductible but I agree with your thinking if
The higher deductible doesn't reduce your payment. The risk is there but it's
Pretty small in your situation.

We have the highest deductible possible, with the highest umbrella policy possible. But we also live in Las Vegas, the world's capital of weird crime. If two people get in a gunfight in our back yard (happened recently elsewhere in town), we don't want to be on the hook for liability.

At age 50 I just filed my first ever homeowners claim. Total damage from a wind/hail storm was $24,500. We've kept our premiums "reasonable" by keeping a $1,000 deductable with a $2,600 wind/hail deductable. New roof, new siding on 3 sides, 4 windows destroyed, back door dented up pretty good, guttering dented up, chimney caps destroyed et....

We decided to take this opportunity to refinance at a lower interest rate and pull some equity out of the house to make other repairs and do some remodling. New heating/cooling, some plumping work, new carpeting upstairs, higher grade insulated windows, security upgrades, new security doors with storm doors and some window treatments (shades/new curtains).

We have a neighbor who I think decided to go without insurance. If so, he's not the only one who wishes he'd kept his insurance up to date. His home is a wreck and will be an eyesore in the neighborhood brining other property values down. I'm hoping he's just been slow to get his claim filed and even slower to get the work started.

Go for a higher deductible. Do not be completely without insurance. A neighbor of friends of ours finally paid off his mortgage. He dropped the flood insurance that the lender had required. Then Sandy hit . . .

Wow, and I thought insurance rates in CA were high. A home worth over $750K with $1M liability coverage costs much less than $1,000 here.

Another reason to buy homeowner insurance when your mortgage is fully paid up: If something happens to your home it is your equity that you will need to protect. Unlike a home that is mainly owned by the bank where folks simply walk away from...

davidvel said:

Wow, and I thought insurance rates in CA were high. A home worth over $750K with $1M liability coverage costs much less than $1,000 here.

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Yep... my insurance is really cheap compared with OP's.

davidvel said:

Wow, and I thought insurance rates in CA were high. A home worth over $750K with $1M liability coverage costs much less than $1,000 here.

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But a home, compared to a mobile home is much less likely to total loss.

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Can you buy high amount (say $1 million) liability coverage? If so, I would compare its cost to what you are currently paying for HO insurance and make a decision. Kind of like a paid off car. Drop the comprehensive and keep the liability.

George

Thanks everyone for all your thoughts...I thought $1000. deductible was high, I'll check to see what higher deductibles are available & how much it reduces the premium. What got me thinking about this is the horror stories I have been hearing from others who were affected by Sandy and have been fighting(and losing) with their insurance companies. Before moving to SC, I lived in BJ and still have family on Staten Island. Some folks had good insurance that turned into bad insurance when it came time to make a claim.