I have a mortgage free home in Miami that as of current.. homeowners insurance policy costs $5k per year. Insurance companies, the few that underwrite here have strict requirements to get down to the $5k range, basically fortifying the home. As often as we get hurricanes here, every passing event seems to invigorate insurance companies more and more to short policy holders against their claims. So what gives??? Spend thousands fortifying the home with shutters, metal roof, etc. where minor hurricane events do not penetrate the home (no claim). While an event sustaining “some” damage, say $10-15k worth, open a claim, and get half that or less even..
Wouldn’t it make more sense to cancel the policy, and pocket the $5k every year?
The gamble lies on major category hurricane events, which seem to occur every 50 to 75 years in the general area, last one being Andrew over 25 years ago.
Even if total loss were to occur, hypothetically, 20 years worth of insurance payments is roughly equivalent to costs in restoring the home. And if one were to happen this year, I am aware FEMA writes loans out to help folks in that scenario, as they did in the Keys for Irma.
Best scenario, of course, would be NOT having any such event ever happen during ownership of the home. while not paying insurance. Would be interested in reading your thoughts; and would you do anything better/different??