I've never understood the desire to cut corners on homeowners insurance given the potential magnitude of a claim versus the cost of the insurance. My ~$375k home is insured for ~$1k/yr. Even if you figure my lot is worth $150k and the rebuild costs of the house are, I dunno, $200k, that's a TWO HUNDRED YEAR payback to forego the insurance. Not insuring a $5k car for $1k/yr, I get, that's a manageable time horizon. 200 years? Hell no.
And that's before you talk about things like liability coverage, etc. Which is another place I think MMM is out to lunch, his whole "no one is going to sue me, I'm not friends with that kind of jackass and the judge with throw a suit out..." Bullshit. Your friend might not sue you, but guess what, your buddy who comes over to help you frame your new shed and he falls 10' and takes an ambulance ride and needs his broken leg fixed etc etc etc...when that guy goes to file a claim with his medical insurance, his medical insurance is coming after YOU. And if you've got no insurance, now you are footing the bill. No one is being a jackass except the insurance company, but guess what, too bad. Glad you saved that $1k/yr though...