Anyone (mortgageless and) decided to drop their home insurance?
http://www.mrmoneymustache.com/2011/06/02/insurance-a-tax-on-people-who-are-bad-at-math/
I will have (after foreclosure ends this month) a rental property worth about $30,000k (no mortgage, in a separate LLC) and the home insurance quotes I have seen are near $1k/month. It just seems like 3% annually is way too high to spend on insurance, so I am planning to forego it. Somehow it seems sacrosanct.
Also, anyone ever stumble across what the approximate % of insurance goes to paying claims (i.e. after taking out for profit and overhead)?
I'm assuming the 30,000k was a typo, and you don't actually mean a 30 million dollar rental (but if ou did, yes, insure it!)
On the other hand if I assume 30,000 for the value of the rental, there's another issue: you said insurance of 1k/month amounting to 3%.. 1k/mo, or 12k/yr on 30k would be 40% to insurance.
If that's a typo too, and it's 1k/yr on 30k rental, then the numbers make more sense. Assuming that, it's really a question of cost vs reward and risk, just like any other insurance question. Can you afford to self-insure?
Try this thought experiment: you get the full house covered either way, but you can have a $1000 annual premium, $500 deductible... Or you can have a $0 annual premium, $30,000 deductible.