This couple saved BIG by going without home insurance. Is it the right move for you?
Soaring insurance premiums are a growing concern for homeowners across the nation, especially in disaster-prone areas like Florida. In response, some are taking a drastic step: dropping their home insurance altogether. This is the story of Jimmy and Heather Riley, a retired couple from St. Pete Beach, Florida, who've garnered attention for saving a significant sum by forgoing home insurance, a strategy they've dubbed "going bare."
Stay tuned to learn more.
Temptation by rising costs
The Rileys' decision stemmed from a steep rise in their annual premium. In 2011, their coverage for their three-bedroom, two-bathroom home jumped to a staggering $7,000, with a $20,000 hurricane deductible. Faced with this hefty cost, they questioned the value of insurance, particularly considering the high deductible.
Jimmy Riley told ABC Action News that it felt like throwing money away. He added that the insurance company would have gotten that money, and they'll just keep raising the rates no matter what, even if he didn't have a claim.
This sentiment resonates with a growing number of homeowners. According to the Insurance Information Institute (III), the percentage of uninsured homes in the U.S. has risen from 5% in 2019 to 12% in 2023. This trend is particularly prevalent in states like Florida and California, where natural disasters pose a significant risk.
![A Florida couple's risky gamble of going without home insurance pays off, but should you follow suit? 2 A man carefully holds a house model in his hands, symbolizing home ownership and real estate investment.](https://calleochonews.com/wp-content/uploads/2024/07/GoingBareInsurance13.jpg)
The "going bare" gamble
The Rileys opted to self-insure, essentially creating their financial safety net. They stopped paying premiums and instead saved the $7,000 annually. They planned to accumulate a sizeable reserve fund that could cover potential repairs or rebuilding costs in case of a disaster.
Over 13 years, their gamble seems to have paid off. They haven't faced any major damage to their home and have managed to save nearly $100,000, money they wouldn't have had with insurance premiums.
Is "going bare" right for you?
While the Rileys' story is compelling, it's important to understand the inherent risks involved in forgoing home insurance. Here's a breakdown of the key considerations:
- Financial Strength: Self-insuring requires a significant financial cushion. The Rileys were fortunate not to experience a major disaster. Unexpected events, like a fire or a severe storm, could financially devastate them if they lack the savings to rebuild.
- Location, Location, Location: The Rileys live in a relatively low-risk flood zone in Florida and haven't faced a hurricane in their time without insurance. However, for individuals living in high-risk areas, the gamble becomes far more precarious.
- Peace of Mind: Home insurance provides peace of mind, knowing you're protected from unforeseen circumstances. The financial and emotional stress of a major disaster without insurance can be overwhelming.
Alternatives to "going bare"
If the rising cost of premiums is a concern, there are alternative strategies to consider:
- Shop Around: Get quotes from multiple insurance companies to ensure you're getting the best possible rate.
- Raise Your Deductible: Increasing your deductible can lower your premium, but remember, you'll be responsible for a higher out-of-pocket cost if you need to file a claim.
- Consider Flood Insurance: If you live in a flood-prone area, consider purchasing separate flood insurance, which is typically not included in standard homeowners' policies.
The Rileys' story highlights the financial burden of rising insurance premiums. However, forgoing home insurance is a high-risk strategy that may not suit everyone. Carefully evaluate your financial situation, risk tolerance, and the specific threats your home faces before considering "going bare." It's always wise to consult with a financial advisor to discuss your options and develop a plan that protects your investment.
Want to stay on top of the latest local news in Miami and money-saving tips? Sign up for the Calle Ocho News newsletter. Are you running a small business in Miami? Reach your target audience with Calle Ocho News. We offer various advertising options to help you connect with local customers. Contact us today to learn more.
Add Comment