Author Topic: Cost of high deductible catastrophic Homeowner's INsurance?  (Read 778 times)

JenniferW

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Cost of high deductible catastrophic Homeowner's INsurance?
« on: September 15, 2018, 01:13:06 AM »
I have an $80k home I pay $1050 per year on for HOmeowner's Insurance here in Oklahoma.

I was wondering if I paid it off soon if I could then get a plan for say $250 per year which covered basically if it burned down or was completely destroyed by a tornado?   Say with a $10000 deductible.

Anyone price catastrophic high deductible homeowner's insurance?

Cranky

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #1 on: September 15, 2018, 05:20:07 AM »
Ask your insurance company.

terran

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #2 on: September 15, 2018, 12:00:46 PM »
Make sure it includes liability too. an $80k loss you can probably handle. Some kid gets hurt on your property and a jury decides it's your fault, not so much.

JenniferW

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #3 on: September 15, 2018, 05:10:54 PM »
Say if that did happen, and most of my assets were in my retirement account, that can't be touched by a liability lawsuit can it? 

katsiki

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #4 on: September 15, 2018, 05:16:54 PM »
Have you asked your agent about modifying your coverage limits?  It sounds like you're overinsured unless rebuilding costs are extremely high where you are.

JenniferW

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #5 on: September 15, 2018, 06:00:07 PM »
Have you asked your agent about modifying your coverage limits?  It sounds like you're overinsured unless rebuilding costs are extremely high where you are.
Actually I have a very good rate here in Tulsa.  Most insurance companies want $1500 per month plus.

Reason being is there are a lot of hail storms here along with wind damage to roofs.   Insurance companies here in Tulsa had to replace a lot of roofs recently and prices went up.

I think they are insuring me for like $100 to $120 rebuilding costs on a home whichis only worth 80k.  They wouldn't let me go lower or if they did it didn't amount to much of a difference in price (5% or something).

secondcor521

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #6 on: September 15, 2018, 08:13:05 PM »
My homeowner's insurance is just under $400 per year for $200K worth of coverage and a $10K deductible.  Liability and some other coverages are included in that premium.

Remember, you probably don't need to insure the value of your land, as your land probably won't be damaged in a costly way if something happens to the house.

Also, since you mentioned tornadoes, I think most policies will cover damage due to wind but not damage due to flooding (that's under a separate policy with the federal government for some reason).

geekette

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #7 on: September 15, 2018, 08:33:21 PM »
I've seen it explained that homeowner policies cover falling water, but not rising water.  Water damage from a tornado would be covered, but not from a creek overflowing its banks.

We have a $2500 deductible.  The last time I checked, the yearly difference in cost between that and a higher deductible didn't make sense (like it would take a crazy number of years of lower cost to cover that extra deductible if we ever had a claim).

tct

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #8 on: September 17, 2018, 12:21:25 PM »
I'm interested in this kind of product as well. Called my insurance agent last week to discuss this. He gave me the option to raise my deductible, however the amount the premium was reduced compared to the increase in deductible did not make financial sense. Seems to me there is room for a new insurance product that would just cover total loss and liability coverage of the desired amount.  At this time I have a $10k deductible, but it really doesn't make sense as I only save approx. $100 per year in premiums between $1k & $10k deductible.

geekette

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #9 on: September 18, 2018, 01:04:43 PM »
It's probably because in case of catastrophic damage of, say, $300,000, their responsibility would only drop from $299 to $290.  Not really worth a big drop in premium for them.

patchyfacialhair

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #10 on: September 18, 2018, 03:00:40 PM »
Most insurance companies (at least the big ones) calculate an estimated minimum cost to REBUILD. What goes into the REBUILD estimate? Cost of demolition and debris removal. Cost of permits and planning and architecture, costs for materials and labor to make your house what it was before. All those line items will go up in price each year, with no correlation to what the local housing market is doing. The insurance companies have no reason to care about the market value or tax value of your home. All they are trying to do is pay what the contract states, which is usually to make the home "whole" again.

The conversation becomes: is it worth it to me to insure this $80k house when it would take $120k to rebuild? That's a personal question. Without insurance, I'd say you'd be opening yourself up to big liability risks, like someone mentioned before, even if you could stomach a total loss.

Your best bet may be to find a broker, ask for minimal coverage for the home with a high deductible, but with solid liability coverage. The big companies probably won't be able to offer a good product that meets that need, but perhaps a local niche insurer will be able to offer that.

SimpleCycle

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #11 on: September 18, 2018, 03:23:43 PM »
Say if that did happen, and most of my assets were in my retirement account, that can't be touched by a liability lawsuit can it?

No, but all your future earnings can be.

Edited to add: and whether your retirement accounts would be subject to judgement is based on state law.
« Last Edit: September 18, 2018, 03:26:14 PM by SimpleCycle »

JoJo

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #12 on: September 19, 2018, 01:26:50 PM »
Aren't there a bunch of earthquakes happening in Oklahoma now?

JenniferW

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Re: Cost of high deductible catastrophic Homeowner's INsurance?
« Reply #13 on: September 19, 2018, 02:38:59 PM »
Aren't there a bunch of earthquakes happening in Oklahoma now?

Only a couple tiny ones that felt like tremors more than anything.  Hardly feels like anything compared my 36 years in California.