Pros And Cons Of Self-Insuring Your Home

Self-insuring your home
More Floridians are opting to self-insure their homes.

Home ownership is a big responsibility, and one of the most important decisions you’ll make is whether to purchase homeowners insurance. Unfortunately, homeowners insurance rates have skyrocketed throughout the state of Florida leading many to reconsider their options. While traditional insurance is the most common route, more Floridians are now considering self-insuring their homes as a way to save money. Below we discuss some of the advantages and disadvantages of self-insuring your home.

What is self-insuring your home?

Self-insurance means that you, the homeowner, are responsible for covering the costs of any damage or loss to your home. This could include anything from a minor repair to a major rebuild. Instead of paying monthly premiums to an insurance company, one option would be to set aside money in a dedicated savings account. For other homeowners, they may feel that they have enough money saved already to cover the costs of any potential losses.

Pros of self-insuring your home

  • Potential cost savings: If you have a low risk of filing claims, you could save money on premiums over time.
  • More control: You have more control over how your money is spent, and you can choose to make repairs or replacements that are not covered by a traditional insurance policy.
  • No deductibles: You would not have to pay a deductible when you file a claim.

Cons of self-insuring your home

  • Financial risk: You are responsible for the full cost of any repairs or replacements, which could be very expensive.
  • Lack of expertise: You may not have the expertise to handle the claims process on your own.
  • No peace of mind: You may not have the peace of mind that comes with knowing that you are covered by insurance.

Is self-insuring your home right for you?

Whether or not self-insurance is right for you depends on a number of factors, including your financial situation, your risk tolerance, and your comfort level with handling claims. Here are some things to consider:

  • Your financial situation: Do you have enough money saved up to cover the cost of a major repair or replacement?
  • Your risk tolerance: Are you comfortable with the risk of having to pay for a large financial loss out of pocket?
  • Your comfort level with handling claims: Are you comfortable dealing with contractors, appraisers, and other insurance professionals?


Self-insurance can be a risky proposition, but it can also be a way to save money on homeowners insurance. If you are considering self-insurance, it is important to weigh the pros and cons carefully and make sure that you are comfortable with the risks involved.

As for some additional tips for self-insuring your home, here are a few considerations:

  • Set up a dedicated savings account to cover the cost of potential repairs or replacements. (An interest bearing account may be preferred here.)
  • Make sure your home is well-maintained to reduce the risk of damage.
  • Consider getting a home inspection to identify any potential problems.
  • Keep detailed records of your home’s contents.

As always, it is important to consult with your financial advisor and insurance broker prior to making any decisions regarding self-insuring your home. In addition, your real estate agent may also be a great resource to discuss these options.

Are you looking to buy or sell real estate in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.