Homeowner's Insurance Don't go bare

Homeowners insurance: Don't go bare
By Kay Bell • Bankrate.com


Homeowners all across the United States are doing double takes as they look at their annual insurance policy renewal statements.
A spate of natural disasters, accompanying insurance claims and subsequent premium increases has pushed some homeowners to the breaking point. Out of both personal and financial frustration, some are considering dropping their coverage.
In the insurance industry, it's known as "going bare." And while it might be tempting if you're looking at a policy price that's tripled or quadrupled in the last year, it's not a decision to be made rashly.
"Two types of people might qualify to go without coverage," says George Yates of Dayton Ritz & Osborne, an insurance agency based in East Hampton, N.Y. "The independently wealthy, with an asset so small to them that it wouldn't matter if they lost it, or someone who just can't afford insurance.
"In either case, it's not particularly good risk management."
But sometimes, a homeowner's day-to-day financial management issues are more pressing.
In Florida, for example, homeowners are finding their premiums have skyrocketed. Add to that deductibles that look like they won't be met unless the structure is destroyed. Plus, many insurers have either gone out of business or decided to stop writing policies, limiting customers' comparison-shopping options.
In the end, many homeowners find themselves in the unhappy position of choosing between high premiums or exorbitant premiums. Or no premiums.