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I've been wondering if there is any alternative to the traditional home insurance market, apart from just dropping it completely. I'm not in a fire area, nor re

I've been wondering if there is any alternative to the traditional home insurance market, apart from just dropping it completely. I'm not in a fire area, nor really any other increased risk, yet premiums just keep shamelessly going up 20-30% / year. I'm sure it looks necessary to the underwriters, but from my perspective it seems like I'm getting lumped in with a lot of people who seem to think insurance is a substitute for a bank account. To me, insurance is for catastrophic losses like a structure fire, or withstanding legal attacks like someone suing you for hurting themselves. But I see a trend of people using it for what are small scale (ice dams) or even what should be routine house expenses (got a 25 year old roof? why patch it when you can get a roofer to tell your insurance that you have wind damage and get a whole new roof!). Even choosing the highest deductibles doesn't really lower premiums significantly. There just doesn't seem to be a way to express to an underwriter "really, I'm only going to call you if my house is a total loss". It's probably just the same oligopolic/info-cartel consolidation that is plaguing the rest of the economy. But it sure is frustrating. Also on the topic of insurance, it really irks me that insurances are allowed to have caps on liability coverage. The entire point of insurance is to cover long tail risk. Instead they upsell you on additional coverage that still doesn't cover the long tail risk.

vuln 3y ago
> routine house expenses (got a 25 year old roof? why patch it when you can get a roofer to tell your insurance that you have wind damage and get a whole new roof!). 25-30 years is about the lifespan of a shingled roof depending on climate. I agree it’s routine maintenance. It’s also 10k-20k in some areas. I much prefer insurance being used for a large issue vs using it to have a tree removed because it was hit by lightening 1-3k.
- mindslight 3y ago
  Sure, but the whole roof doesn't vanish when it's at the end of its lifetime. Rather you start to get more leaks and whatnot and can pay to patch those spots, and/or start thinking about replacing the whole thing.
User23 3y ago
Unlike fires earthquakes and other real catastrophes that can’t just be legislated away, unlimited liability absolutely can be. But so long as juries are willing and able to render absolutely ridiculous verdicts, the insurers can’t feasibly cover all your risk.
bob1029 3y ago
> apart from completely dropping it. This is what I have done. Cash and semi-liquid investment vehicles are king if you have enough to cover the worst case. I get called a "crazy person" whenever lack of coverage comes up at friend & family gatherings, but I honestly don't feel any anxiety over it. Worst case scenario, my home burns down or experiences some other total loss and I have to pay 100% out of pocket to put a roof back over my head. Yeah this sounds kinda bad, but there are a lot of statistics in my favor here. I WFH full-time, so the probability of me not being at home when something "weird" happens is diminishingly small. Additionally, I can't recall the last time I saw a fire truck heading to an actual structure fire in my community. These newer homes are kinda safe by default. Water/wind damage is a concern, but I've been through enough hurricanes to know that TWIA coverage is the biggest scam ever perpetuated on homeowners in the gulf coast region.
- JumpCrisscross 3y ago
  > Worst case scenario, my home burns down or experiences some other total loss and I have to pay 100% out of pocket to put a roof back over my head Worst case is your house fire burns down the neighbourhood. This is why while self-insuring your own property is fine, liability is something even billionaires insure.
  - bob1029 3y ago
    Worrying about being sued because of a structure fire spreading in a modern suburban development is pretty out there, IMO. If we really want to get into worst case, there are all manner of things that no sane person would ever insure against. What kind of coverage does the typical home owner have along axis of "my house fire also was the eventual reason that 20 other homes burned down"?
    - xur17 3y ago
      Not typical, but umbrella insurance is the path to covering something like this. That said, I do agree with you with regards to insurance. Health, car, house, etc insurance all seem to be closer to payment plans rather than actual insurance for catastrophic events. If there were viable options that had 10k or even 50k deductibles that noticeably lowered premiums, I would sign up.
maxerickson 3y ago
How much would you expect an unlimited liability policy to cost? My homeowners policy, in an area with pretty minimal disaster risk, is roughly inline with or somewhat below the national average (per dollar of property insured) and my premium went down by $1 compared to last year.
WalterBright 3y ago
> premiums just keep shamelessly going up 20-30% / year Have you ever tried doing home repairs? Those costs go up 20-30% per year.
- mindslight 3y ago
  The spike in labor costs is part of the issue, for sure. But that explains one or two years, rather than the continual 20-30% increases I've seen for a bunch of years in a row.
  - WalterBright 3y ago
    The price of chicken today at the local grocery store went up 20%. Half gallon of milk, 20%. In one day.
briHass 3y ago
Do you own your home outright? If you don't, the mortgage issuer (i.e. the real owner) would likely not play ball with catastrophic coverage. I've managed to keep my premium low by increasing the deductible to the max and also not increasing the covered amount (replacement cost). Even though I own the property, I'm not balsy enough to completely drop coverage. But, I also don't live in an area where the land is 80%+ of the value. For reference, I pay probably about a quarter of a percent of the insured value per year with a $3000 deductible, which seems pretty darn reasonable compared to comprehensive/collision car insurance.
dehrmann 3y ago
Do any policies have high ($5k+) deductibles?

vuln 3y ago

> routine house expenses (got a 25 year old roof? why patch it when you can get a roofer to tell your insurance that you have wind damage and get a whole new roof!). 25-30 years is about the lifespan of a shingled roof depending on climate. I agree it’s routine maintenance. It’s also 10k-20k in some areas. I much prefer insurance being used for a large issue vs using it to have a tree removed because it was hit by lightening 1-3k.

mindslight 3y ago
Sure, but the whole roof doesn't vanish when it's at the end of its lifetime. Rather you start to get more leaks and whatnot and can pay to patch those spots, and/or start thinking about replacing the whole thing.

User23 3y ago

Unlike fires earthquakes and other real catastrophes that can’t just be legislated away, unlimited liability absolutely can be. But so long as juries are willing and able to render absolutely ridiculous verdicts, the insurers can’t feasibly cover all your risk.

bob1029 3y ago

> apart from completely dropping it. This is what I have done. Cash and semi-liquid investment vehicles are king if you have enough to cover the worst case. I get called a "crazy person" whenever lack of coverage comes up at friend & family gatherings, but I honestly don't feel any anxiety over it. Worst case scenario, my home burns down or experiences some other total loss and I have to pay 100% out of pocket to put a roof back over my head. Yeah this sounds kinda bad, but there are a lot of statistics in my favor here. I WFH full-time, so the probability of me not being at home when something "weird" happens is diminishingly small. Additionally, I can't recall the last time I saw a fire truck heading to an actual structure fire in my community. These newer homes are kinda safe by default. Water/wind damage is a concern, but I've been through enough hurricanes to know that TWIA coverage is the biggest scam ever perpetuated on homeowners in the gulf coast region.

JumpCrisscross 3y ago
> Worst case scenario, my home burns down or experiences some other total loss and I have to pay 100% out of pocket to put a roof back over my head Worst case is your house fire burns down the neighbourhood. This is why while self-insuring your own property is fine, liability is something even billionaires insure.
- bob1029 3y ago
  Worrying about being sued because of a structure fire spreading in a modern suburban development is pretty out there, IMO. If we really want to get into worst case, there are all manner of things that no sane person would ever insure against. What kind of coverage does the typical home owner have along axis of "my house fire also was the eventual reason that 20 other homes burned down"?
  - xur17 3y ago
    Not typical, but umbrella insurance is the path to covering something like this. That said, I do agree with you with regards to insurance. Health, car, house, etc insurance all seem to be closer to payment plans rather than actual insurance for catastrophic events. If there were viable options that had 10k or even 50k deductibles that noticeably lowered premiums, I would sign up.

maxerickson 3y ago

How much would you expect an unlimited liability policy to cost? My homeowners policy, in an area with pretty minimal disaster risk, is roughly inline with or somewhat below the national average (per dollar of property insured) and my premium went down by $1 compared to last year.

WalterBright 3y ago

> premiums just keep shamelessly going up 20-30% / year Have you ever tried doing home repairs? Those costs go up 20-30% per year.

mindslight 3y ago
The spike in labor costs is part of the issue, for sure. But that explains one or two years, rather than the continual 20-30% increases I've seen for a bunch of years in a row.
- WalterBright 3y ago
  The price of chicken today at the local grocery store went up 20%. Half gallon of milk, 20%. In one day.

briHass 3y ago

Do you own your home outright? If you don't, the mortgage issuer (i.e. the real owner) would likely not play ball with catastrophic coverage. I've managed to keep my premium low by increasing the deductible to the max and also not increasing the covered amount (replacement cost). Even though I own the property, I'm not balsy enough to completely drop coverage. But, I also don't live in an area where the land is 80%+ of the value. For reference, I pay probably about a quarter of a percent of the insured value per year with a $3000 deductible, which seems pretty darn reasonable compared to comprehensive/collision car insurance.

dehrmann 3y ago

Do any policies have high ($5k+) deductibles?