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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Suma who wrote (48464)	2/13/2006 10:32:15 AM
From: Think4Yourself	Read Replies (1) \| Respond to of 306849

The way I figure it, most of the potential problems you need insurance for are external and totally out of your control. If your neighbors are morons you need fire. If your neighbors are drug users, have wild parties, or have teenagers, you probably need theft too. And who can tell when a water line will rupture, or a solder joint fail. The only thing you can know for sure is that you won't be home at the time! ;) We have full insurance on the home, with a high deductable. It is intended for catastrophic problems only, like the 41" water main running under the street rupturing, or the (I think 21") gas main running next to it rupturing. Our little side street is part of the regional distribution grid for Water, Gas, and Phone. We always have utility trucks of some sort running by and there are lots of underground rooms.

To: Suma who wrote (48464)	2/13/2006 11:33:27 AM
From: GraceZ	Read Replies (2) \| Respond to of 306849

It's not just the house and your possessions which are insured it is you, for liability. With no insurance you could lose your house in a lawsuit. You used to be able to just buy fire insurance through a mutual type insurance company. Sometimes whole communities would form their own mutual insurance company. Was the sharp increase due to the insurance company raising their rates or from a sharp increase in the replacement cost of the house? A lot of people think that they are getting reamed by the insurance company only to realize that the total amount of insurance has risen sharply due to the cost of rebuilding their house going up in their locale. Florida has really high construction rates due to the amount of rebuilding that had to be done after the hurricanes, it drove up the costs on everything. If it's a rise in their rates (amount you pay per $100 of coverage) you could shop the policy around, usually the price you get to switch is much lower than the price to stay with your current carrier. The other thing we did to keep our policies within a reasonable range was to keep the liability at the minimum and then buy an umbrella policy that picks up where the underlying insurance ends. It's pretty cheap and it allows you to keep your auto and homeowners at the minimum for liability, around 300k, but be covered up to a million. Of course, having lots of liability coverage probably increases the probability of getting sued at some point. If you want to be completely judgement proof, don't own anything and don't buy insurance.