Another year - another homeowners Insurance question... (mortgage, credit)

[craigiri]

Our older (1950's) home is worth approx. 125 - sitting on a 125 Lot.

Being 27 feet above sea level, nothing is going to happen to the lot. So IMHO our insurance covers only the replacement cost of the home and contents.

Since it's an older home we are paying very high rates - I think about $2800 a year. The insurance doesn't cover much! I read a bit of the policy and although it covers wind damage it does not cover water damage as a result. So if the roof blew off and the house was ruined, they'd replace the roof.

It's come to the point where it almost seems not worth the while. After all there have been almost no events in recorded history a mile inland (2-3 miles from barrier islands) which would even harm the house, let alone be a total loss. To add to this, since we are snowbirds there is very little of value inside the house to protect - so we are overpaying for contents.

I'm wondering if I can get a "fire only" type of policy that covers nothing other than that? I don't mind paying a reasonable premium but almost $3K to cover a relatively safe 125K property seems overkill.

Has anyone done this type of thing? Or, is it usually a matter of one or the other - that is, either self insurance (none) or all-in?

[Sunshine Rules]

Do you have a newer roof? Have the windows been replaced (with permits)? Has the garage door been replaced in the past few years? Any of those things can potentially save you money on your insurance rates if you have a wind mitigation inspection done on your home.

Wind mitigation discounts are available from Florida insurance companies for building features that reduce damage during high wind events like hurricanes. Building features that reduce wind damage and can lower wind insurance premiums include:

Age of Roof Covering
Rood Deck Attachment
Roof Shape
Roof to wall attachment
Opening Protection (windows, Doors, Garage Doors)
Secondary Water Resistance

If you roof is newer than 2002 you will qualify for the Age of Roof Covering Credit. If you Roof Slopes on all 4 sides then you will qualify for the Roof Shape discount. Others discounts are not as easily determined and will require inspection your attic. A licensed wind mitigation inspector can determine which credits your home is eligible for. After his inspection he/she will provide you with a Wind Mitigation Form that you will provide to your insurance agent. They will then apply the credit to your policy and it will reduce your rate.

Your insurance agent should be able to give you a list of inspector names.

[motordavid]

If you are mort free, you can get any level of insurance you choose, or go 'self-insured'...

If you have a mort, the mort co will require certain levels of insurance. Even if that, you should be able to adjust down your contents to a much smaller level, and most HI policies have some built in noise/margin supporters in terms of line items that are often 'included' in any policy unless you choose to delete or adjust downward some of those items.

A Wind Mit inspection is worth the $100-$200 imo. And, a good agent/your current agent should be willing to review your policy and offer some cost containment items that can be excluded or reduced.
GL, mD

[craigiri]

No mortgage and house has flat roof (well, maybe a 1/2-12 pitch - roll roof) - and it's not worth it to upgrade the windows, roof and all of that stuff. It's 1955 vintage.....it goes without saying that no event in the last 60 years has put a scratch on the house or, for that matter, the entire area.

The Wind Mitigation was done and I guess there is none (no upgrades) which is why the rates are high. But I don't think the rates are honestly calculated on "our" house but rather reflect more of an overall Florida situation (I suspect, as in all insurance, that some pay for others - we probably all pay for barrier islands, low lying areas, etc.).

Well, I guess I'll start early and ask my agent for ala carte prices. I think I'd be happy with fire and basic homeowners liability (someone hurts themselves on our property, etc).

[sware2cod]

Check if you can remove 'contents' coverage from your policy. Flood insurance allowed this so I removed contents coverage. My non-flood insurance carrier wouldn't allow complete removal of contents coverage. But they allowed me to switch the contents from full replacement cost to 'actual cash value' - which is the used value of contents. I did this and got a savings.

Also check into increasing your deductible. Try several different deductibles to see how much this impacts your premium.

[d4g4m]

Insurance providers pick the 2% thing as default as the deductible. This means that if the insurance company decides that it would cost $200,000 to rebuild your house [if it was blown of the foundation], your deductible is $4000. If the only damage the house incurs is that the singles get blown off, you'll still be writing a check to the shingle installer for $5000-$7000 [of which half goes directly to workers comp ins] There are many options for deductible [lower and higher]
I haven't got a clue how they pick a value for 'contents' . I was told I must have it. I have a value that is the least that they will accept.

[d4g4m]

Correction to post #6 I typed the wrong numbers. With a deductible of $4000, you would pay the first $4000, insurance company pays balance.

[RhysNJ]

It's a pretty easy question to answer. If you drop the policy entirely, you just have to ask yourself if you are in a financial position to:

1. Replace your house and everything inside of it out of your own pocket with like kind and quality, new, when a tornado or fire destroys it all. Or if a water pipe from 1955 bursts and destroys everything on the main level.
2. Pay for the temporary housing you'll need for the year it will take to replace your house or make other repairs
3. Hire a lawyer to defend you, and pay out of pocket for any judgements against you or settlements for any bodily injury or property damage you are blamed for.

That example of wind damage allowing water to enter the house is not accurate. It would only apply if part or all of the roof blew off and you did nothing to protect the inside and some time went by, later allowing rain to enter.

Those are the main ones, although modern Homeowners policies cover quite a bit of other things as well. If you have no mortgage and can easily afford those costs, there is no reason to carry a Homeowners policy.

Flood policies allow you to drop the contents but Homeowners gives it to you as a percentage of the dwelling limit. It can be raised but usually not deleted for credit. Landlords carry a different type of policy when no contents is needed.

Rhys