California E&S Insurance

Perhaps what's needed is a poll: 1) What percentage of the net cost of replacing your home (either by reconstruction or by buying a neighboring property and selling your old house's lot, whichever is lower) are you paying each year for homeowners' insurance? I pay $681/year to Farmers to insure about $150k of replacement cost with a $10k deductible, so 0.45% of the home's replacement value. (no hurricane, earthquake, tsunami, or wildfire risk, but some tornado risk.) 2) At what percentage of cost would you consider self-insuring? 2% would tip the scale for me. At that level of insurance costs and at today's safe investment yields, I could easily earn a net 7.5% on a growing pile of money (premiums save plus low-risk yields). I'd be better prepared to handle losses smaller than my $10k deductible, such as a new roof, and I would be at less risk of being defrauded by my insurance company, having to sue, etc. Looks like my insurance would have to get about 4x more expensive before this option looked good on paper, so my market could probably absorb lots more rate increases before people like myself started self-insuring. However another factor to watch is the ease of getting claims paid in full. If that risk got high enough I might prioritize self-insurance.

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  "thread_title": "Will home insurance become so uneconomical/awful it makes sense to self-insure?",
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