[prairigh]

Been reading some of the posts about insurance in Florida and they talk about self insuring. What is that? Thanks.

[macguy]

Originally Posted by prairigh

Been reading some of the posts about insurance in Florida and they talk about self insuring. What is that? Thanks.

I would think in the truest sense it would mean having a fund to draw from should you have the need. In other words instead of paying $7,000 a year to an insurance company paying it to the account you have set up. If nothing ever happens you have the money and hopefully if something does happens it will cover it. The big problem is, few people would ever actually do this. They would spend the money and find themselves unable to pay for even a small loss or repair if it did occur.

I think most peoples idea of being self insured is "No insurance", not putting the money away in case. I see a difference between say health insurance and home insurance. I would never go without health insurance. The costs could be almost UN-payable if something happened and can go on for years maybe the rest of your life. A house on the other hand, if you come right down to it is not such a big deal. Even a total loss can be easily paid for. Just myself as an example, I have been involved in the building trades and can build a house for a reasonable cost even in today's environment.

But that would be the absolute worst case scenario though. Chances are, nothing will ever happen and if it did would just require some small repairs and you would have plenty of money to do them for a reasonable cost if you know a little something about it. Self insuring is not a bad idea on paper but I am afraid human nature being what it is, most people would fail at systematically putting away the money.

[bmurphy]

I think the person who talked about it was probably nuts. It's better to have real insurance than to take the cop out route and "self insure" which means basically nothing.

[macguy]

Originally Posted by bmurphy

I think the person who talked about it was probably nuts. It's better to have real insurance than to take the cop out route and "self insure" which means basically nothing.

Can you explain what you mean?

[daniellefort]

But how many people can afford to buy a home and still have enough money to put aside to cover the cost of the home should something happen to it? What if it burned down, a tornado came by and took it out, Maybe some crazy driver drove through the wall which seems to happen more often than not lately. I mean unless you have enough money to cover your home loss at the same time you buy the home i see that as taking a huge risk. That's like not having health insurance. All it takes is one unexpected health condition and your in debt up to your eyeballs.

[macguy]

Originally Posted by daniellefort

But how many people can afford to buy a home and still have enough money to put aside to cover the cost of the home should something happen to it? What if it burned down, a tornado came by and took it out, Maybe some crazy driver drove through the wall which seems to happen more often than not lately. I mean unless you have enough money to cover your home loss at the same time you buy the home i see that as taking a huge risk. That's like not having health insurance. All it takes is one unexpected health condition and your in debt up to your eyeballs.

No, with your health the possible loss can be almost unlimited and last a life time. With a house you know exactly the risk you are taking is and it is a decision you are able to accuratly make. I have said this before if you are paying say $5000 on a house worth $200,000 you are paying 5% of the value of the house every year and a total loss pays you 20 to 1 on what you are paying. The real chance of losing your house really may be that of lottery numbers.

The insurance may be over price by like 1000 to 1. If the odds were really 20 to 1 something was going to happen to your house you would never sleep another night worrying about it, why even bother buying a house. This should be so illegal, it is worse odds then anything you will find in any casino in the world. It is thievery of the highest order praying on fear and it is legal..WTF

[bmurphy]

Originally Posted by macguy

Can you explain what you mean?

I don't feel that self insuring is good enough, basically what daniellefort said: If something big happens you're likely not to have enough money saved. Stashing $100 and calling yourself self-insured (which was the tone of the person who suggested it, NAH, awhile back) is NOT good enough. He was informal enough about it that I figured he'd stow away maybe $100 or $200 or something.

[macguy]

Originally Posted by bmurphy

I don't feel that self insuring is good enough, basically what daniellefort said: If something big happens you're likely not to have enough money saved. Stashing $100 and calling yourself self-insured (which was the tone of the person who suggested it, NAH, awhile back) is NOT good enough. He was informal enough about it that I figured he'd stow away maybe $100 or $200 or something.

It is like everything else, those who can least afford it always pay through the nose. They can't afford to take any chances. That is also why I said most could not do it if they wanted to. They would pi$$ away the money anyway and not have anything to cover the repairs should they need to. It is just a shame to function based on fear, often fears that are unfounded.

I just explained what self insuring is not suggesting people with no money do it. You can put like $50,000 in an account or investment ear marked for repairs and add like $5000 a year and see what happens as is grows. You know what will happen, nothing and you will spend the money some time later on your retirement.

[macguy]

Originally Posted by macguy

No, with your health the possible loss can be almost unlimited and last a life time. With a house you know exactly the risk you are taking is and it is a decision you are able to accuratly make. I have said this before if you are paying say $5000 on a house worth $200,000 you are paying 5% of the value of the house every year and a total loss pays you 20 to 1 on what you are paying. The real chance of losing your house really may be that of lottery numbers.

The insurance may be over price by like 1000 to 1. If the odds were really 20 to 1 something was going to happen to your house you would never sleep another night worrying about it, why even bother buying a house. This should be so illegal, it is worse odds then anything you will find in any casino in the world. It is thievery of the highest order praying on fear and it is legal..WTF

I meant to say 2 1/2 % and 40 to 1

[Angelrocks]

Was anybody around during Hurricane Andrew? I saw the damage it did and it was just more than a few repairs! A whole city needed to be rebuilt.