Should I self-insure my home?

Facing rising litigation costs, the insurance industry has been consistently raising premiums on homeowners throughout Florida. In fact, many homeowners have recently seen their rates rise by 20% and even doubling in some cases. If this weren’t bad enough, some Floridians are seeing their policies cancelled entirely, forcing them to find alternatives.

Unfortunately, the insurance companies have sustained some serious losses in recent history due to Hurricanes Irma and Michael, not to mention a rise in fraudulent claims. Naturally when this happens, these rising costs are spread across consumers resulting in rising premiums or companies even pulling out of certain higher-risk markets.

What are your options?

In the event that your insurance premiums have risen significantly or your carrier is not renewing your policy, you first step should be to work with a knowledgeable insurance broker to assist you with shopping around for better rates. If you don’t have a recommended insurance broker, your real estate agent may be a good source of referral. Oftentimes, homeowners that have their premiums raised considerably by their insurance provider are able to find an alternative option that is similar to what they were previously paying.

In the event that you are not able to obtain any insurance coverage, the only option may be Citizens insurance. This is the state-sponsored insurer that is oftentimes the last resort for many Floridians. At a growth rate of 4,000 policies per week, Citizens is utilized by many throughout The Sunshine State.

What about self-insuring?

It is estimated that approximately 12% of Florida homeowners have opted to self-insure. In other words, they do not carry homeowner’s insurance and instead would be solely responsible for any damages sustained to the home. With this said, mortgage companies require homeowner’s insurance. Therefore, self-insuring your home is only an option if you have paid off your mortgage entirely.

A strategy being adopted by homeowners opting to self-insure is to take the money that normally would be spent on their insurance premiums and investing it elsewhere or even putting it aside for any potential future repair costs. In South Florida, a common approach is to have a new metal roof installed along with high-impact windows and doors throughout the house. While the cost to make these upgrades can be quite expensive, the premium savings by self-insuring for several years may offset most or even all of these costs.


It is important to also note that the price for building materials has risen considerably in recent history. This combined with continued inflationary pressures would likely make the repair or even rebuild costs of a damaged home extremely expensive. As a homeowner that does not have a mortgage, it is important that you consider all of these factors. In addition, everyone has a different risk tolerance level that needs to be considered. If you are the type of homeowner that will always be worrying about being self-insured, you may be better off obtaining homeowner’s insurance. Other factors such as the location and elevation of the home will also be critical in aiding you to make your decision.

Are you looking for a recommendation for a homeowner’s insurance broker? Do you have questions about the South Florida real estate market? We can help. Contact Live South Florida Realty, Inc. today!


REALTOR® with Live South Florida Realty, Inc.