OT- Home insurance

pmcollectour

Someone asked me today if he had to have homeowners insurance if he owned his home (no mortgage payments).

I do not know the answer. Anyone here work in the insurance business ?

He lives in New Jersey and either wants no homeowners insurance, or the cheapest thing possible if required by law.

Any help would be appreciated (and he'll pay in gold to keep this on topic )

derryb

Homeowner's insurance is required by anyone holding a mortgage on the property to protect their interest. No mortgage, no requirement. A homeowner without a mortgage may want insurance to protect his own investment. In such a case you can buy reduced coverage although the agent will try to talk you into full coverage. I recently reduced mine because in the event of a total loss, thanks to the real estate crash, I can buy a replacement home cheaper than I can rebuild.

Barndog

IMO going without HO insurance is foolish. Sure, shop around, buy only what your situation calls for, but cover yourself.

Of course, if your home is worth next to nothing, I guess it could make sense. But how many sub-ten thousand dollar homes are occupied by owner?

johnny9434

best to get caught with it then with out it. jmo

guitarwes

Seems like if the mortgage is paid for, the small % cost of keeping HO insurance would be a no brainer. Why would you want to start over with mortgage payments if you lost your house, assuming you want a comparible house and you're not flithy rich?

If you are financially seucre, then reduce the coverage so the premiums won't be as much if you're just dying to save a few bucks.

Bochiman

The person asking the question doesn't seem to have thought things through.....

Replacing a home, or parts of it, as covered with homeowner's insurance is only 1 piece of the pie.
Protecting oneself if someone gets hurt on your property is another. Is the person so rich that they don't mind being sued if someone claims injury on the property?

Whenever I have these types of insurance questions, I call my insurance broker, and he does NOT just try to sell me on anything new or higher. As a matter of fact, some of the times I have called him, he has been the one recommending how to decrease my payments...one time with no change in policy at all as they had a "new" type of policy change to benefit people, of which I was qualified.

So, he should get on the phone, talk to his broker, and walk through the scenarios. If he can't do that, he needs a new broker or new insurance company. Something tells me though that he may not be the easiest to talk to as he likely thinks everyone just wants his money and he won't believe what he is told.

bstat1020

<< <i>The person asking the question doesn't seem to have thought things through.....

Replacing a home, or parts of it, as covered with homeowner's insurance is only 1 piece of the pie.
Protecting oneself if someone gets hurt on your property is another. Is the person so rich that they don't mind being sued if someone claims injury on the property?

Whenever I have these types of insurance questions, I call my insurance broker, and he does NOT just try to sell me on anything new or higher. As a matter of fact, some of the times I have called him, he has been the one recommending how to decrease my payments...one time with no change in policy at all as they had a "new" type of policy change to benefit people, of which I was qualified.

So, he should get on the phone, talk to his broker, and walk through the scenarios. If he can't do that, he needs a new broker or new insurance company. Something tells me though that he may not be the easiest to talk to as he likely thinks everyone just wants his money and he won't believe what he is told. >>




Well said!!

messydesk

The insurance isn't just for the dwelling, but also liability.

57loaded

<< <i>The insurance isn't just for the dwelling, but also liability. >>



yes!

and why self insure your own home when you can buy a policy and carry a high deductible?

derryb, does your policy have a co-insurance clause? hopefully you are insured to at least whatever % value that may be

its true that rebuilding is more expensive than just buying somewhere else. i doubt your policy would allow you to just buy another house even with a full ordinance endorsement. many do not give you the choice to be paid and walk away happily ever after.

derryb

co-insurance clause? no idea. I had my agent insure my home (paid for) for what I think I would need to buy a suitable replacement in the event it gets totaled. l'll also have to fund whatever mess needs to be removed from what's left of the current one in the event it is destroyed. I live in a hurricane prone area, so some insurance is a no-brainer.

fishcooker

Depends. I would never be without insurance, but Uncle Sam has been known to step in where people didn't (see Katrina).

GrumpyEd

One more thing to check is if there's an HOA they may take legal action if your house it totaled and you walk away and leave it. Check with a lawyer and read the HOAs policy.

I think good advice is keep at minimum a policy with a high deductible to keep covered in case of a total loss or liability.

derryb

<< <i>One more thing to check is if there's an HOA they may take legal action if your house it totaled and you walk away and leave it. Check with a lawyer and read the HOAs policy.

I think good advice is keep at minimum a policy with a high deductible to keep covered in case of a total loss or liability. >>


municipal building code in most places would require demolition or removal of an unsafe structure. Also, land value would not be recovered with a sale until cleared.

yellowkid

No, but it certainly is a bad idea.