"Going bare" aka dropping property insurance - so many questions about this ... (Lakeland: 2015, how much)

[Marguerite2015]

Property insurance in Florida has skyrocketed in cost and some (whose homes are paid off) have opted to go without. I have heard of a number of policies that have doubled and tripled in cost in 2 years, to the point where some are being asked to pay over $11k a year - over $900 a month - for a single family home. This doesn't include flood insurance.

While it's certainly understandable given the cost, in a largely flat state hit by floods, hurricanes and sink holes to the degree that Florida is, let alone how ridiculously litigious the state is, opting to go without insurance, and the liability coverage therein, may seem too risky to some.

For those who opt to do so, here are some questions/scenarios:

1) You just bought a house with all cash, so no mortgage. It's your only full time home - not a 2nd home and is not in a food zone. 6 months later, a hurricane, fire, flood and/or sinkhole causes $75k in damage, or more. (FEMA says 1 inch of water can cause $25k in damage). If you are not a contractor, what do you do if you don't have $75k in the bank? Does any sort of disaster declaration help pay for any of this?

2) Hurricane Ian caused Hiroshima-like devastation - flattening much of Fort Myers Beach and caused historic flooding in central Florida. If your home is totaled or nearly totaled, what do you do? Not trolling. Serious question. Do you sell the piece of land where the house once stood and try to find another place to build or buy for whatever you manage to get for the land? If an emergency declaration is made, do you get paid for the loss of your home to some degree? If so how much?

3) Regarding liability: Let's say somebody - a friend of a friend, or their kid - trips on your front step or back deck, hits their head, suffers a bad injury, needs surgery and sues you. What do you do? Hire your own attorney, yes, but how do you pay for the eventual settlement if you don't have tens or hundreds of thousands in the bank?

[gypsychic]

Originally Posted by Marguerite2015

Property insurance in Florida has skyrocketed in cost and some (whose homes are paid off) have opted to go without. I have heard of a number of policies that have doubled and tripled in cost in 2 years, to the point where some are being asked to pay over $11k a year - over $900 a month - for a single family home. This doesn't include flood insurance.

While it's certainly understandable given the cost, in a largely flat state hit by floods, hurricanes and sink holes to the degree that Florida is, let alone how ridiculously litigious the state is, opting to go without insurance, and the liability coverage therein, may seem too risky to some.

For those who opt to do so, here are some questions/scenarios:

1) You just bought a house with all cash, so no mortgage. It's your only full time home - not a 2nd home and is not in a food zone. 6 months later, a hurricane, fire, flood and/or sinkhole causes $75k in damage, or more. (FEMA says 1 inch of water can cause $25k in damage). If you are not a contractor, what do you do if you don't have $75k in the bank? Does any sort of disaster declaration help pay for any of this?

2) Hurricane Ian caused Hiroshima-like devastation - flattening much of Fort Myers Beach and caused historic flooding in central Florida. If your home is totaled or nearly totaled, what do you do? Not trolling. Serious question. Do you sell the piece of land where the house once stood and try to find another place to build or buy for whatever you manage to get for the land? If an emergency declaration is made, do you get paid for the loss of your home to some degree? If so how much?

3) Regarding liability: Let's say somebody - a friend of a friend, or their kid - trips on your front step or back deck, hits their head, suffers a bad injury, needs surgery and sues you. What do you do? Hire your own attorney, yes, but how do you pay for the eventual settlement if you don't have tens or hundreds of thousands in the bank?

No one should "go bare" if it's their only home, and don't have funds in the bank to self-insure. And everyone should at least carry liability.

We have our main home in Lakeland, it is fully paid for and we carry full coverage homeowner's which is fairly reasonable by Florida standards. We do have a "vacation" home in Sarasota where we let it go bare except liability, because the insurance (with flood) was just insane. The lot is worth nearly the same with or without the house, and we only keep things of little value there, so for us it was a no-brainer. It makes sense in our situation.

[DWMachineshop]

When I paid off my last house 20 years ago I called my ins company and cancelled. The 100 year old oak trees around the house still looked pretty good. We have just completed our forever house in the woods of Central
Florida and I will not insure it either. The 200 year old oak trees surrounding it look just fine and they will likely be good for the 20 or so years my Wife and I have left. At 5000 per year that adds up pretty fast as to what you can fix or have fixed IF something catastrophic happened. Also a very smart lawyer once told me that the best way not to get sued is to have no insurance. YMMV.
FWIW my local State Farm agent quoted me $600 per year on my new 2023 1200 SF home in the woods.

[elnina]

Originally Posted by DWMachineshop

Also a very smart lawyer once told me that the best way not to get sued is to have no insurance. YMMV.

Well, if there is no insurance, debt from a lawsuit is often erased through bankruptcy.

If that's your thing, go ahead...

[MortonR]

Originally Posted by elnina

Well, if there is no insurance, debt from a lawsuit is often erased through bankruptcy.

If that's your thing, go ahead...

True, but many forms of litigation, especially personal injury, are not shielded by bankruptcy laws in Florida. In other words, if you’re sued for personal injury here, declaring bankruptcy doesn’t get you off the hook.

One alternative is an “umbrella” policy. They’re relatively inexpensive, maybe $60/month for $1M coverage, and can shield you from most litigation or awards. That’s not to say someone wouldn’t go after your personal assets as well, but in most cases the search is for the deepest pockets and usually ends there.

RM

[fajitajamboree]

If I did not need it for my mortgage, I'd probably wouldn't roll the dice and "self" insure but instead keep the bare minimum catastrophic insurance.

FWIW, the house that backs up to mine was paid off and uninsured... and they had a fire which has made it a total loss. From what I understand, the older couple has now moved into their daughters house and do not have the funds to rebuild. Rare- probably, but impossible, certainly not.

[hardluk1]

Originally Posted by Marguerite2015

Property insurance in Florida has skyrocketed in cost and some (whose homes are paid off) have opted to go without. I have heard of a number of policies that have doubled and tripled in cost in 2 years, to the point where some are being asked to pay over $11k a year - over $900 a month - for a single family home. This doesn't include flood insurance.

Have you consider trying to sell and move to an lower cost to insure and live area , Even to a different state . We did not move do to cost to live in florida but we did move to WNC years ago and find cost to live here today is still far less than when we moved away from SW FL years ago .

[oceangaia]

Originally Posted by DWMachineshop

Also a very smart lawyer once told me that the best way not to get sued is to have no insurance. YMMV.

I can believe that. Lawyers don't take cases to make a point or send a message. A good liability policy tells them they will get paid. But plenty of unprotected liquid assets also tells them they will get paid so you better make sure your assets are as "judgment-proof" as possible. Winning a judgment and collecting on a judgment are two different things. They can't just take everything you own.

[oceangaia]

Originally Posted by fajitajamboree

If I did not need it for my mortgage, I'd probably wouldn't roll the dice and "self" insure but instead keep the bare minimum catastrophic insurance.

FWIW, the house that backs up to mine was paid off and uninsured... and they had a fire which has made it a total loss. From what I understand, the older couple has now moved into their daughters house and do not have the funds to rebuild. Rare- probably, but impossible, certainly not.

It's definitely a big risk but total loss events are rare, statistically. You can't protect against everything in life. It's also possible that they could have been well-insured yet died in that fire.

[LKJ1988]

I have saved big time going bare blare and no Health Ins as well mel. Over 200k in 20 years.