@@bruceiehl9953 ...and havent for the last 30 years!..again...lets thank all those rich real estate investors..and their gangster companies...for again...making their greed our cross to bear...
CA is the most Marxist State. And like all Marxist/Communist stunts - USSR, Maoist China, North Korea, Cambodia, Cuba, Venezuela - economic destruction & human calamity ensued. After 100 years of Marxist catastrophies & hundreds of millions dead, it has never been more evident that Marxists are bad faith people no better than Nazis/fascists. The destruction/raping/pillaging of CA - the wealthiest state & 5th largest economy in the world - is textbook Marxist "wealth redistribution" & "equality of outcome". Since this doesn't work, it is failing spectacularly in CA just as it failed disastrously in the USSR, Maoist China, North Korea, Cambodia, Cuba, Venezuela.
Same reason so many of us WORKERS are now homeless in Florida. Wages have risen on average 6% while housing has risen on average 138%. And that's not counting the increase cost of everything else. Go figure.
I live in Hollywood Fl. I paid off my mortgage six years ago when I sold my boat. Saving 6k/year on my homeowners insurance. I dropped the windstorm but I did keep my fire and liability insurance on the house. So if you really have to save, you have to sacrifice sometimes.
Naples - 1600sf - paid off - insurance was $2200 - now $8700 and they only insured for $200k NOT replacement- dropped all insurance and went with $1million liability Lourdes of London $523 a year - Florida insurance is a rip off
There is also the possibility that after a significant enough event, the insurance company would claim insolvency and none of your prior payments would mean a thing. This is NOT the age of integrity.
All you need to do is check the AM Best rating of a company and don’t do business with any company with less than an A- rating. Also, unless you are insured with a non-admitted carrier in your state, if the carrier went bankrupt any claims you incur will be paid by your state’s guaranty fund.
And If you place NO TRESSPASSING signs on your property and someone enters and gets injured they are responsible not you. So if you self Insure post these on all corners of your lot.
I just change my roof in my townhouse for $7500 and my homeowners insurance cost $ 4800 with new roof and windows shutters… I want call tv or police or maybe FBI
The scam that these insurance companies are running, is tremendous. I think as Decosta continues to rise like this more and more people are going to wake up to the fact that they're being way over charged and might as well look at other ways to invest the money.
Monolithic dome home. Build one of those. It is tornado-proof, hurricane-proof, termite-proof, fireproof, and even bulletproof. There is a famous one in Pensacola, Florida that has been hit a few times. Storm surge is still a problem, but mostly to contents and not structure.
@@MichaelBordenaro In all honesty, I don’t know why they aren’t more promoted. They are still unconventional, but you see plenty of gymnasiums and churches adopting the build and becoming storm shelters. My guess would be that it is political and the necessity of insurance is just one more way to squeeze money out of the people.
I have a coworker and her and her husband are looking to sell their home because of homeowners insurance and the property taxes. Both of these people make decent money… that’s how it is in Florida now.
Oh if I knew what I know now I would have done so many things differently. I made huge bucks in the last 35 years or so and I pissed so much of it away. Young people PLEASE BE SMART and save money and make the right decisions in life. I’m 61 years old and I’m retired and doing fine BUT if I had RUclips 20 years ago I would have been so much better off. Listen to Michael he always has great information. Blessings everyone, Carlos ✝️🙏❤️😊🇺🇸
Even me too Carlos I didn't have RUclips growing up until I was already out of high school. And even then, not much good content like today. The things we wish we would've known we were younger
Another added benefit (in FL) is if your roof is still in good shape after 10 years (and may last an additional 10 years), you're not forced to replace for $50k or more in order to get insurance. You replace the roof when it's necessary.
@@danman1287 Not my problem. Plenty stories about people with perfectly good roof who can't get insurance unless they have their roof replaced if it's older than 10 years. Insurance without roof coverage isn't an option...get up to speed!
When did people start believing 50 thousand for a roof replacement was reasonable? Was this before or after the roof scammers convinced everyone in florida that's what it costs? It doesn't. If someone tells you that's what it will cost you, you need to roll your eyes and laugh them right off your property.
@@carolbagwell6769 I had an investment property in Englewood FL...did the roof 8k 1500 sf w 1 car garage. One quote came in 50k. Lol. FL is scam land n state with bad good
That's crazy we have a 30 year Timberline roof in NJ and it's 7 years old and there is nothing wrong with it. Our homeowner's insurance is $1,900 for a house worth $750,000. We do have to pay state income tax though...and our property taxes are $10,400 annually. It cost us around $12,000 for the (new) roof back in 2016. It's in fine condition. If I sold the house now I could put in the ad that it has a newer roof bc it's supposed to be a 30 year roof.
In the 33 years I have owned my home, I have never had homeowner's insurance. Since my dad and I built the house, I have done all of the maintenance and repairs since. The whole home including the roof is concrete.
I never had a claim until hurricane Francis hit my Jupiter FL house in 2004. The deductible was 2% of the insured value which was about half the cost of a roof. I had to hire a roofer and turn in proof of completion to be reimbursed half of the cost. By the time I could get a roofer, it was raining into the house and hurricane Jeane came just a few weeks after hurricane Francis. I endured a nightmare even with insurance
I'm glad you said that because people think that once you have insurance your iron clad covered and that's just not the case. In fact, it's just as much of a nightmare, if not more than going it yourself
@@MichaelBordenaro It's MUCH more of a nightmare with insurance! That's why my advice to everyone is to never accept their offer. Contact a lawyer BEFORE you make your claim, because if you miswritten 1 tiny thing in the claim, the insurance company will hang on to it to pay you less. They'll do anything they can to pay you less. Never contact your insurance, have your lawyer do that for you. When they see that, they'll prefer to just give you the right amount of money, and screw up the next person. Yes, you'll end up paying for the lawyer, but in a serious claim, it's worth it! If it's something small, you don't need a lawyer.
I bought a fixer upper, cash fixed it up cash and self insure. I'm lucky because I live in central Florida. Its rare that we have any more issues than flooding, which in my area would have to come up about 10' or possibly a cat 2 in which the roof might get ripped shingles off which since I already know how to repair that, it wouldn't cost me more than 5K for a new roof. I've lived in Central Florida for 35 years, we haven't had anything over a cat 1 here. One thing to reduce you liability of an injury on your property, is to put up no trespassing signs. Plus I have a huge hedge around my whole property so a person can only enter in 3 car size openings.
Not having homeowners insurance and saving the cost is a good idea unless you live on a farm where your tractor, side by side, implements are covered under the insurance.
We are currently building an ICF home (insulated concrete form) (with walls 1 foot thick of concrete) in the panhandle (the emerald coast). Once I pay off the home, I will cancel all insurances. If the home gets crushed, then that means the whole neighborhood or that part of the state is utterly destroyed and the insurance companies will immediately file bankruptcy.
I'm just going to throw this out there.. as we age out.. are medical bills get higher. My husband had early-onset Alzheimer's. He was 68. I was Twenty-One years younger than him.. don't worry I robbed the cradle.He was 47 I was 26 we were married 41 years. LoL. He ended up suffering from Alzheimer's for 21 years. The last seven of those he had liver: bile duct cancer. It wiped us out. The co-pays for medications for supplies. People have to remember as we age our bodies age. Medical bills can be staggering.
Maybe that's even more reason to self insure on your home. If you put the money in your own coffers and had no casualties, that money could have softened the blow of the medical bills. Also, holistic health will help you avoid lots of those medical bills. I'm sorry for the rough ending.
Assuming..... A- You continue to put $500/mo away B- You leave it alone. Most will fail to do either at the minimum. But liability is the one that will bankrupt you if it happens.
We self insured from 1998-2013. We were on water. I think our basic homeowner ins. would have been 4-5K. Then there was windstorm, maybe 7-8K. Finally flood ins. (interesting that even though we were on water, we were not in a flood zone (maybe $500)). I paid for the flood ins. During those years we had several hurricanes, but it was an unnamed storm which spawned a tornado which took off a corner of the (two story) roof. The cost of repair was less than a deductible would have been. (All these numbers are best as I can remember)
Your home is all paid off. That is the only way a person can self insure. I probably will self insure if I were stuck with Citizens because it is insolvent as they insure far too many people.
Interesting timing with this video. I'm a homeowner in Commiefornia, just got an email from Farmers today telling me "With your upcoming renewal, you’re going to see an increase in your premium of $2002.00, which is about 242.08%." Another reason to leave this state. Problem is, this could start happening in other cities or states as well. Insurance companies are scum, and if you work for an insurance company or sympathize with them in any, don't try to convince me they're not.
Many years ago I worked for a large European insurance as an inspector and did some claims investigations. Fraud was endemic from customers and we had to be so careful. The company had a policy 'think of the company first, customer second" so we had to try and screw the policy holder, or lose our jobs.
When I pay off my home I will self insure and invest $6000 per yr. I'll keep my flood policy which is only $400 a year and maybe get a small policy for my contents (ie renters ins). What would be an interesting sequel to this video is to find out if any banks / credit unions allow their mortgage customers to self insure, esp if the customer can offer proof of funds from 401K or brokerage accounts, that could cover any damage to the home.
I've never heard of any mortgage companies or banks, allowing anyone to self insure. Although you made a good point that if someone has the net worth or proof they can pay on their own. I don't see why they wouldn't.
@MichaelBordenaro you can with car insurance..well, I remember a time that you could self insure.. you get a certificate thru the state showing you have proof of funds. I guess I'm not sure you can still do that. I'll have to Google it. Maybe you can do that with a mortgage. I bet if mortgage insurance get too high they could start allowing that with mortgages, then self insuring wouldn't only be for people that have paid off their home.
I've watched several of your videos and I really enjoy them, brother. I'm in Canada and things are slightly different up here, but the fundamentals of what you discuss are the same.
I recently received a letter from my insurance company. They are not going to renew me because of the proximity to the coast. Lol. I’ll be self insured.
Your math at the end is completely wrong because it assumed that you pay off all 5 claims at the end of the 30 year period or you have the money outside of the $6000/year to fix your issue without touching the portfolio. If you had an issue in year 6, you would likely need to draw down your self-insurance stock portfolio in year 6 which would then mean you don’t end up with $658k in year 30.
I realize the math may end up different in the end. If you need to make a claim or two. That's not really the point. It's just a simple exercise and I kept it simple on purpose. Of course if you have to make a claim your nest egg at the end will be smaller, but the net result is the same. You'll still end up with something rather than nothing.
Was wondering if I was the only one who recognized this risk. Any one of the claims he discussed would wipe out 2+ years of contributions and greatly lower the 30 year value. The power of compounding is in TIME. I modeled having to draw down the entire balance after 2 years and that alone lowered the end balance by ~10%. Here's another data point to consider. Michael's 7% is below the historical average but that 7% is higher than the last 23 years. I modeled $500 a month starting in January 2020 through May 2023 in the S&P 500 ETF (SPY) with dividends reinvested and ignoring inflation. The final result is $500,645, substantially below Michael's calculations. One last statement here. Michael's 7% average over 30 years also doesn't take into account inflation on costs. So, to assume those 5 claims would be at today's nominal dollar value in 30 years is an incorrect assumption. And, the worst case scenario is to have your $500k home (worth how much in 30 years?) completely destroyed requiring a rebuild any time during this period. You wouldn't have the funds, even 30 years from now, to do so unless you could do a majority of the work yourself AND pass city/county inspections..
The TOWN took it in my brothers case here in Maine. The town, and they put it up for auction and sold the water frontage part of it for $10,000 to a neighbor of ours and would not sell it to us his relatives. Evil In 2021
Michael, great show. We just made the self insure move. DeSantis never talks about this insurance nightmare. Only discounts for baby strollers and Sun Pass discounts. Wow what a leader. The legislature, although Conservative, still sides with the insurance companies. Next move will be leaving this state and also the country. Nice presentation.
Get the highest deductible available. Use only for a catastrophe. The insurance companies hire thousands of attorneys that will look for anyway not to pay. Insurance is a scam.
@@MichaelBordenaro you deserve all wonderful things Dear 💙💚💛 When will you be in Cali? It's really nice in San Diego. Not sure on the homelessness there.
All totaled, I have had nearly a dozen hurricane hits on my Florida properties. In Indiana, my basements filled with water a dozen times between 2 homes. One house took a direct tornado hit. Then straight wind and hail hit it. Then my third Indiana house burned with $160k claim. Then my second Indiana house I live in got straight wind roof damage, hail damage a few times and basement filled at least 5 times. The tornado damage replacement roof on first house was put on sloppy by supposed pro and that caused thousands in water damage a few years later. Of all these events, I only claimed the tornado, the fire, one hail, one hurricane, and 2 straight wind events, all in the last 19 years. About $230k total damages paid by insurance companies. Probably 25 other events that I just ate it and fixed it all myself. Stuff happens.
Michael, Good information! No, you were not advocating but without the knowledge people can't make an informed decision. You were providing the knowledge and options. Thanks.
I've self-insured my FL single-family residence since I purchased it in 2011. Last year, Citizens quoted a rate of $700 for bare-bones basic coverage, $100K liability, no windstorm. With windstorm it would have been $1800. Citizens was the only insurer that would cover me (and that's with a new roof, electric panel, and wind mitigation report). Citizens only offers liability at $100K. I don't carry flood insurance. AllState just quoted $700 for a $1 million liability-only policy.
I LOVE how you play out these things I wonder while driving and don't ever get around to researching. You go through all the things I was wondering about.
I decreased my homeowners big time by going to liability. Included in my policy was replacement for everything such as the hot water heater, washer/dryer, dishwasher, oven, etc. TOTAL replacement cost. I didn't need that. My question is, if you stop your insurance and want to pick it up again later, would your premium be higher because you've been without? They always ask you if you are currently insured and w/ who when you get quotes. I read at one time that insurance rates are higher if you cancel and then pick it up again. If your insurance company requires you to replace your roof, even though it doesn't need it yet, in order to continue your policy, think about that. You can put away over $10,000 towards your self insure. That's huge. Think about this as well: when there is a major storm w/ damage in your area, you can apply for assistance. Ron DeSantis did this when Ian hit Ft Myers.
This isn’t right for everyone but it makes a lot of since. I would like to add that most Florida houses are made of concrete block and dont have as much wood as homes in other parts of the country. One reason people need to consider insurance more if they have an overly expensive home. For most average or or slightly less than average homes its worth considering not having any or just liability coverage
Here in the PNW I always hear how insurance companies won’t insure you if you have a wood stove, or they’ll drop you. For some people and homes, it’s a way of life. Nothing like driving away all that rain with a toasty fire.
Well and the constant fear of that happening year after year is not with it. You want to be able to sleep at night knowing that you’re covered from a catastrophic event against your property…. It’s about the peace of mind
It's getting to point you have enough money to cover any lost you may suffer to replace your home! It's going to take years to get that money to cover your lost till you get to that point. Great video and some really good advice! Thanks
I wonder how many insurance claims are initiated by landlords vs owner/occupant? Betcha landlords account for a super majority of claims. Why you ask? Because landlords never foot the bill. The tenant always does. Homeowners I know only pay for homeowners insurance because they have to. They’d never even think of filing a claim for fear of retaliation
Insurance: Fear sells…until it doesn’t. Insurance is a scam/pure greed anymore. Medical,dental,home and more. Why would I want to work my life away to insure something that may not even happen just to put money in someone else’s pocket? I’d rather walk away/self insure.
Your numbers need to adjust for when the claim comes in. A claim in year 1 puts you in debt, not having a claim until year 10 or 20 or whatever had different returns.
You’re show is so similar to I Allegedly. Well I think you are both chocked full of personality and put on a good show. The only difference with your show is you are full of very useful information and great advice. Basically what I’m saying you’ve got content! Thanks
My experience. Pay insurance for years. Then need to file a claim. Then have to fight the insurance company to get them to pay for just the majority of the claim. The rest out of pocket. Screwed again.
OH... One more thing.....Insurance is nothing more than the old " protection racket".....In Life don't "BET" against yourself...OK...now I'm Finished....(lol)....Thank you...
This is an excellent video! I was lucky and downsized. With the equity was able to pay cash for my much smaller home here in Florida. I am self insured. Insurance here in Florida is a scam. I do have liability insurance (umbrella) with state farm. But I do believe this is your most informative video as of date, great job!!!
"Self-insurance" is always cheaper--otherwise insurance companies would not "make" money. The issue is really whether you can afford to weather a catastrophic loss without insurance, and how long you require insurance. If you are younger and can afford to pay out-of-pocket, then insurance makes no financial sense. But if can't afford to pay out-of-pocket a large expense, or you are 75 and don't have a lot of years left, then insurance makes more sense.
If you have enough money, you can easily self-insure but as you said, your home should be paid off and keep the money in an index or money market fund. You need to set aside enough to cover a complete loss of your home, which most people cannot do.
Kudos, Micheal, for the research. I self-insure, 7 feet above sea level in St. Pete. Flood, wind, and fire would be $14,000 annually. People here who have insurance are afraid to use it because they know the insurers will raise their rates if they do (and game down their claims anyway). Pay the insurers if you must; if you don't have to, fear is a thief.
As long as the person is disciplined I think this would be a great idea. Thanks for sharing your thoughts. Look foward to your next video. Much love from San Francisco, Bay Area.
@@MichaelBordenaro Looking foward to your CA trip and the content you make while here. I’ll definitely be on the look out for you when you arrive. Would be cool to see you making one of your videos. I’m pretty close to wine country ( North Bay Area). Im born & raised and currently work in San Fran. Chat soon my friend. Keep the amazing content coming.
As others have commented what if you have a catastrophic event or even large damage just a few years into self insuring? That would or could put you into a situation you can't get out of or tens of thousands behind so it would destroy your savings model. It also depends greatly on many other factors, my home is on a dangerous curve with regular accidents. 15 years ago drunk came barreling into my garage, $40K damage to my home and $42K my vehicle. All paid except deductibles. Another scenario, if you may need to take out a reverse mortgage in retirement, they check your credit scores and if you've kept up to date with paying your home owners insurance and property taxes, if not and bad credit, no reverse mortgage so you are forced to sell your home because you can no longer afford it. Better think twice, not an as easy decision as it's made out to be. And as you stated, the vast majority of people will not have the discipline to put that money away and will spend it instead, or will need it for the inevitable emergencies.
That sounds like a really good plan. Wish I thought of it 30yrs ago but the problem is 30yrs ago I had a mortgage and still do so the mortgage company requires it and I'm guessing no way to get out of that. It would be nice to have that much money saved after all those years especially since I've been paying home owners insurance for 35yrs and never had a claim!
I moved into a new build development in Texas and had a hail storm demolish my 6 month old roof. The cost of the new roof was $38,000 I was told that it was the second storm in 5 years here that demolished the roofs.
Thank you for doing this topic. I own the same very nice mobile home for 17 years. I left the state of Florida and rented it for 2 years. The insurance for a homeowner is different than from a rental. Suffice it to say, when I returned to the property, I am faced with a LOT of obstacles to get the insurance back. The alternative is Lloyd's of London which charges more than double what Citizens' costs. In my area (North Florida) we have had very dangerous lightning storms barreling through. (My place is paid off. Insurance is optional.)
Yes....if u decide to drop coverage...they won't let u back in.. I made this point before. All these home owners should sell if they decide to drop coverage n move to another state. It's just a matter of time before u come out of pocket... It's self insurance... Michael can work the numbs such that one can be a big loser too
@@danman1287 I think I made a good decision to drop my homeowners' insurance after34 years and no claims. But I'm in N. FL, on fairly high ground for FL. And Michael forgot to factor in the fact that deductibles make homeowners' even more expensive. I always had a fairly high deductible all those years, and would've had to meet my deductible anyway, before insurance would pay for any damages I could've had.
@@commonsense6967 that remains to be seen. If u don't have money in reserve u don't self insure. U sell n move. People do this with healthcare too between 55-65. When a home FL is not insured I almost never buy it unless it's priced like a foreclosure at bottom of RE cycle. U can't get insurance again after u drop it...this is FL. Good luck ...hope u have a stash of money ready to pay contractors.. most people drop insurance Bec they can't afford it not Bec they made actuarial decision. The real issue is not the cost benefit ...but people can't afford to live in FL... U need to make more money.
@@danman1287My plan is to self-insure, and I always had 5 to 10% hurricane deductible to save on insurance premiums, anyway. So yeah, I've always known I have to keep money in reserve for potential damages. State Farm told me I'd have to go through underwriting again if I wanted insurance again, meaning my old house, built in 1961, would have to meet their standards. More BS that I don't miss. And I've never even thought about the insurance status of a house I m interested in buying, because no matter what, I pay a good contractor or home inspector to thoroughly go over everything and hopefully fix any problems before I sign the deal. Insurance has nothing to do with what shape a house is in.
@siouxrose Make sure you don't have any big trees near your home. I once had half a huge Live Oak fall on my roof right over my head! (I was in bed!) No damage, really, it only tore off half a shingle, but the roof beams on my house are big planks. Stay safe!
I actually use this investment strategy and it works great, I only wanted to add a correction, you don’t pay capital gains tax on long term investments , you pay a much cheaper rate of tax , capital gains is for short term investments under a year.
I dropped my homeowners insurance 15 years ago after they raised it for five years in a row. I put $2,400 in the market and it just kept going up from there. Now they want $6300 to insure my house. I have $101,000 in that account now. I make an automatic deposit each month.
Michael I hope you are well. Amazingly, my wife and I just bought a house in St Johns County Fl. Since we paid cash, we were just discussing self insuring the house. Your video and videos are always on point. You actually gave us the numbers we needed to make an educated decision. If you are wondering why we bought now, well, we have passed up on a ton of houses waiting for the bubble to burst. But we simply couldn’t pass on this one. Too perfect of a house for us. If the market drops, well, it drops. Anyway, thanks for your dedication to helping your listeners with really valuable information
Good subject matter. I agree, 99% of homeowners can’t/won’t self-insure. Those that can must keep up with inflation. Better option: Buy and hold stock in these insurance companies. Why do you think Warren Buffet owns GEICO? 😏
Very interesting MB! Paying off the mortgage early just in order to take advantage of that choice, may really save $. Thanks for the math lesson, ive been too lazy to figure it out but was like "hey, wait a minute"
I did this for 10 year on a number of rental houses in Florida. I calculated that over that period I could have one house destroyed over the period which would be the same as all the payments. Just took liability and put in a company.
I live in Naples Florida and I now self insure. I don’t put 6k away but I am putting away 3500.00. I buy CD’s but may look into your idea of investing in the market. The CD’s have to be renewed every 6 months which is not a big deal. The average is 7% overall but a big turn down could really affect your investment. Something to think about.
By no means am I saying that anybody should invest all their money into the stock market. It is volatile I only mentioned this is the example because that's what most people do.
The first couple years we were in our house, we got hit with a huge hail storm. Self-insured sounds good, but if you don't have that money already saved, one would be taking out a second mortgage to have a roof. It's gambling. Look at all the hurricanes. FL homeowners could lose everything.
I am going to start a homeowners insurance company where the policy is 10% 25% 50% the current premiums in FL. How? If house is damaged. I would pay the insured 10% 25% 50% of their recovering cost. Sounds silly? Not if you own the house, no mortgage, and/or are filthy rich.
We went self insurance 5yrs and for us it was the best thing we did. I told my wife when we pay this house off the insurance company is going to start raising the premiums, and at that time we paid $2500yr and insurance started raising it $500 a yr before we cut ties. We we're ok going into retirement with over $10k a month tax free/disable vet . Our mortgage payments $600 a month at the rate the insurance company was increasing the insurance was going to exceed the monthly payments,so we brought the bank out and we save over $30k in interest to the bank. Owning a home outright is worth it 😊
Related to the 94 year old woman that lost her house and getting some of her equity back. It has always been like that in Palm Beach County. Years ago my friend lost his house due to not being able to pay the mortgage so it was auctioned off. He was incarcerated so I helped him get a lawyer who petitioned the court. Although he didn't end up with much he did get a little bit of money from his equity after the lawyer and lender was paid.
A complication with self insuring or NOT buying homeowner's insurance: If you are a high/highish net worth individual, you arguably need liability insurance in some form. As far as I know (ask an insurance expert), umbrella policies also known as "excess liability insurance" generally require a given amount of homeowners insurance (maybe $300,000 depending on the policy?) and "insure over" your homeowner's and auto liability policies. It might be possible to find an umbrella that works differently. If so, it's likely more expensive than say, $300 per $1,000,000 of umbrella coverage.
Right...all these nutjobs saying liab insurance is cheap blablah. It's Bec they require other insurance in front position. Misinformation galore by idiots. They think there is a free lunch... insurance is all about math .. n I doubt the avg joe has the math skill of actuaries... They just want to believe Bec they don't have the money.
SP5 hundred has gone up about 7% per year +2% dividends. I have been in the S&P 500 Index fund since 1985…each dollar I invested at that time is now worth $42 or if you reinvested dividends it is worth $60.
It just keeps raising. At what price doesn’t it make sense to afford the insurance? In 10-15 years from now could insurance cost $15,000 to $25,000 a year?
If you can self-insure up to higher and higher deductible, at some point you maybe able to self-insure at some point. I would always keep liability, perhaps at a higher deductible. You'd still need to have a paid-off mortgage, as any mortgage would require coverage.
My wife and I purchased a 1,000 sq. Ft fixer in NE Fl back in 2016. Relocated from Cali and have replaced everything in the home. One major claim after hurricane Mathew to the tune of 16K to repair damage from a tree that fell on the house. Whew! Our insurance is $130/mo. and we have the federal flood insurance to boot. That runs 600/ yr. Interesting concept to sel insure. We have evacuated 6 times and decided to purchase property in N Carolina in the event we need to relocate or bug out during a storm. Still fixing that place up but at least we can camp in comfort in a beautiful mtn. top area. No flood worries. The price we pay to live near the St John's River close to St. Augustine. Beats the fire and earthquake worries in San Diego County mtns. Got to wonder what is next?
Anyone who’s got a mortgage can’t self insure. The mortgage lender requires it to protect its interest. Eliminating everyone who has a mortgage doesn’t leave a lot of people to participate in self insuring. I wonder what percentage do? I’ll bet it’s much less than 10%.
@@MichaelBordenaro I know you mentioned about insurance being required by lenders. I was mainly wondering if there’s any data on how many or what percentage of homeowners actually do self insure.
I’ve been meaning to get to this video for a few days. Can’t believe what I’m hearing, v good, you’re like becoming an investigative reporter. Excellent. That’s what everyone should be doing. The Bible says so too…as good Bereans, to prove all things! (Sadly, sob, most in country are under Mind Control. Heard that term for years, not completely knowing what that was. Found out, in the last few years…it’s believing false information, whether mainstream, etc., whatever). He wants real believers to follow the Truth, which is Him. Good Job, Michael B. Channel….you get a 🌟 ⭐️ 💫 Star….Stars. Keep on this Narrow Path as Jesus said…it will lead to all truth. (Done preaching now….) ✅😀 But, now, we’re holding our breath, as you’re About To Drop Your Investigative Findings. I bet the ins co’s are not hurting. And we know you’re about to say this, as we see from the title of the video. We paused the video to write this comment. Great Job. All heaven is smiling too, bel it or not, it’s true, when one, seeks, investigates, and then Finds! We will probably be in shock at what you’re about to say, but we suspected it. Pt. 1
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Why Are There SO MANY HOMELESS IN CALIFORNIA? ruclips.net/video/p1gIaL-pDMg/видео.html
"SELF INSURE" = "SELL & MOVE" no other logical way to describe it ! Cheers , joey d. / Miami Beach
Can you afford median price of $700,000 in LA on $40,000 a year? Not a state in America can afford a 2 bedroom apartment on the current minimum wage.
@@bruceiehl9953 ...and havent for the last 30 years!..again...lets thank all those rich real estate investors..and their gangster companies...for again...making their greed our cross to bear...
CA is the most Marxist State.
And like all Marxist/Communist stunts - USSR, Maoist China, North Korea, Cambodia, Cuba, Venezuela - economic destruction & human calamity ensued. After 100 years of Marxist catastrophies & hundreds of millions dead, it has never been more evident that Marxists are bad faith people no better than Nazis/fascists. The destruction/raping/pillaging of CA - the wealthiest state & 5th largest economy in the world - is textbook Marxist "wealth redistribution" & "equality of outcome". Since this doesn't work, it is failing spectacularly in CA just as it failed disastrously in the USSR, Maoist China, North Korea, Cambodia, Cuba, Venezuela.
Same reason so many of us WORKERS are now homeless in Florida. Wages have risen on average 6% while housing has risen on average 138%. And that's not counting the increase cost of everything else. Go figure.
Taking a 94 year old lady's Home is ..Criminal !!...Our country has really Lost It's Way !....Another Great Video, Michael, Thank you..
I agree, Jim but it sounds like there's going to be some payback on this finally. Hopefully she at least get some money back. She deserves.
I live in Hollywood Fl. I paid off my mortgage six years ago when I sold my boat. Saving 6k/year on my homeowners insurance. I dropped the windstorm but I did keep my fire and liability insurance on the house. So if you really have to save, you have to sacrifice sometimes.
Damn. You're my goal.
As a single 30 year old guy I'm doing well in life. I have to pay off this damn house.
I did the same (except the boat part)😂
After u get hit by a direct hurricane than u will beg FEMA for assistance... Boomers
@@rell660 Put extra Cash in T-Bills THEN pay off whole house.Times change u may need the $$ down the road..😁😁😁😁
I'm 40, live in Kendall. Got 7 years left, but insurance rates have been a nuance.
Naples - 1600sf - paid off - insurance was $2200 - now $8700 and they only insured for $200k NOT replacement- dropped all insurance and went with $1million liability Lourdes of London $523 a year - Florida insurance is a rip off
That is a total rip off. Glad you saw through it and did something about it.
There is also the possibility that after a significant enough event, the insurance company would claim insolvency and none of your prior payments would mean a thing. This is NOT the age of integrity.
All you need to do is check the AM Best rating of a company and don’t do business with any company with less than an A- rating. Also, unless you are insured with a non-admitted carrier in your state, if the carrier went bankrupt any claims you incur will be paid by your state’s guaranty fund.
Exactly
Happened in the Oakland Hills fire, back in 1991 out in California.
And If you place NO TRESSPASSING signs on your property and someone enters and gets injured they are responsible not you. So if you self Insure post these on all corners of your lot.
I just change my roof in my townhouse for $7500 and my homeowners insurance cost $ 4800 with new roof and windows shutters… I want call tv or police or maybe FBI
The scam that these insurance companies are running, is tremendous. I think as Decosta continues to rise like this more and more people are going to wake up to the fact that they're being way over charged and might as well look at other ways to invest the money.
I'm self-insured for Liability and Fire only. Hurricane coverage is the majority of the costs. Liability and Fire are pennies compared to windstorm.
Monolithic dome home. Build one of those. It is tornado-proof, hurricane-proof, termite-proof, fireproof, and even bulletproof. There is a famous one in Pensacola, Florida that has been hit a few times. Storm surge is still a problem, but mostly to contents and not structure.
@Leonnie13 - I think I saw that years ago on The Weather Channel probably. That DID look like it would be hurricane proof.
Yep that's a great idea
@@MichaelBordenaro In all honesty, I don’t know why they aren’t more promoted. They are still unconventional, but you see plenty of gymnasiums and churches adopting the build and becoming storm shelters. My guess would be that it is political and the necessity of insurance is just one more way to squeeze money out of the people.
I have a coworker and her and her husband are looking to sell their home because of homeowners insurance and the property taxes. Both of these people make decent money… that’s how it is in Florida now.
Oh if I knew what I know now I would have done so many things differently.
I made huge bucks in the last 35 years or so and I pissed so much of it away.
Young people PLEASE BE SMART and save money and make the right decisions in life.
I’m 61 years old and I’m retired and doing fine BUT if I had RUclips 20 years ago I would have been so much better off.
Listen to Michael he always has great information.
Blessings everyone, Carlos ✝️🙏❤️😊🇺🇸
Even me too Carlos I didn't have RUclips growing up until I was already out of high school. And even then, not much good content like today. The things we wish we would've known we were younger
Another added benefit (in FL) is if your roof is still in good shape after 10 years (and may last an additional 10 years), you're not forced to replace for $50k or more in order to get insurance. You replace the roof when it's necessary.
Just ask for insurance without roof coverage... U think they don't have stats on claims. Seems like part of your problem is 50k for new roof?
@@danman1287 Not my problem. Plenty stories about people with perfectly good roof who can't get insurance unless they have their roof replaced if it's older than 10 years. Insurance without roof coverage isn't an option...get up to speed!
When did people start believing 50 thousand for a roof replacement was reasonable? Was this before or after the roof scammers convinced everyone in florida that's what it costs? It doesn't. If someone tells you that's what it will cost you, you need to roll your eyes and laugh them right off your property.
@@carolbagwell6769 I had an investment property in Englewood FL...did the roof 8k 1500 sf w 1 car garage. One quote came in 50k. Lol. FL is scam land n state with bad good
That's crazy we have a 30 year Timberline roof in NJ and it's 7 years old and there is nothing wrong with it. Our homeowner's insurance is $1,900 for a house worth $750,000. We do have to pay state income tax though...and our property taxes are $10,400 annually. It cost us around $12,000 for the (new) roof back in 2016. It's in fine condition. If I sold the house now I could put in the ad that it has a newer roof bc it's supposed to be a 30 year roof.
In the 33 years I have owned my home, I have never had homeowner's insurance. Since my dad and I built the house, I have done all of the maintenance and repairs since. The whole home including the roof is concrete.
Your house is highly protected. Most homes are not.
Wow, that's awesome. Thanks for sharing that here. Probably inspirational for others reading it.
@@bruceiehl9953 You are correct!
I never had a claim until hurricane Francis hit my Jupiter FL house in 2004. The deductible was 2% of the insured value which was about half the cost of a roof. I had to hire a roofer and turn in proof of completion to be reimbursed half of the cost. By the time I could get a roofer, it was raining into the house and hurricane Jeane came just a few weeks after hurricane Francis. I endured a nightmare even with insurance
I'm glad you said that because people think that once you have insurance your iron clad covered and that's just not the case. In fact, it's just as much of a nightmare, if not more than going it yourself
The deductible based on the policy limit and not the amount lost is a kick in the ass.
@@MichaelBordenaro
It's MUCH more of a nightmare with insurance!
That's why my advice to everyone is to never accept their offer. Contact a lawyer BEFORE you make your claim, because if you miswritten 1 tiny thing in the claim, the insurance company will hang on to it to pay you less. They'll do anything they can to pay you less. Never contact your insurance, have your lawyer do that for you. When they see that, they'll prefer to just give you the right amount of money, and screw up the next person.
Yes, you'll end up paying for the lawyer, but in a serious claim, it's worth it! If it's something small, you don't need a lawyer.
@@shane250/ Excellent advice.
I bought a fixer upper, cash fixed it up cash and self insure. I'm lucky because I live in central Florida. Its rare that we have any more issues than flooding, which in my area would have to come up about 10' or possibly a cat 2 in which the roof might get ripped shingles off which since I already know how to repair that, it wouldn't cost me more than 5K for a new roof. I've lived in Central Florida for 35 years, we haven't had anything over a cat 1 here. One thing to reduce you liability of an injury on your property, is to put up no trespassing signs. Plus I have a huge hedge around my whole property so a person can only enter in 3 car size openings.
Not having homeowners insurance and saving the cost is a good idea unless you live on a farm where your tractor, side by side, implements are covered under the insurance.
We are currently building an ICF home (insulated concrete form) (with walls 1 foot thick of concrete) in the panhandle (the emerald coast). Once I pay off the home, I will cancel all insurances. If the home gets crushed, then that means the whole neighborhood or that part of the state is utterly destroyed and the insurance companies will immediately file bankruptcy.
Thats a good point!
I'm just going to throw this out there.. as we age out.. are medical bills get higher. My husband had early-onset Alzheimer's. He was 68. I was Twenty-One years younger than him.. don't worry I robbed the cradle.He was 47 I was 26 we were married 41 years. LoL. He ended up suffering from Alzheimer's for 21 years. The last seven of those he had liver: bile duct cancer. It wiped us out. The co-pays for medications for supplies. People have to remember as we age our bodies age. Medical bills can be staggering.
Maybe that's even more reason to self insure on your home. If you put the money in your own coffers and had no casualties, that money could have softened the blow of the medical bills. Also, holistic health will help you avoid lots of those medical bills. I'm sorry for the rough ending.
Assuming.....
A- You continue to put $500/mo away
B- You leave it alone.
Most will fail to do either at the minimum.
But liability is the one that will bankrupt you if it happens.
It only takes one lawsuit stemming from someone getting seriously hurt on your property to cause you to lose everything.
U can insure for liability has nothing to do with coverage for the dwelling.
@@miguelriva8650wopiqmal Thats what I did.
That’s why you by a cheap umbrella liability only policy. For example, we have 20 properties we insure for only $250 every 6 months, total.
@@SilverStacker56 What are some typical base liability limits?
Umbrella insurance works great for that.
We self insured from 1998-2013. We were on water. I think our basic homeowner ins. would have been 4-5K. Then there was windstorm, maybe 7-8K. Finally flood ins. (interesting that even though we were on water, we were not in a flood zone (maybe $500)). I paid for the flood ins. During those years we had several hurricanes, but it was an unnamed storm which spawned a tornado which took off a corner of the (two story) roof. The cost of repair was less than a deductible would have been. (All these numbers are best as I can remember)
Your home is all paid off. That is the only way a person can self insure. I probably will self insure if I were stuck with Citizens because it is insolvent as they insure far too many people.
Bottom line is that insurance companies make huge profits so that shows that the odds are in your favor 👍, great video Mike!
That's why there r so many insurance cos in FL? How many went bankrupt?
Interesting timing with this video. I'm a homeowner in Commiefornia, just got an email from Farmers today telling me "With your upcoming renewal, you’re going to see an increase in your premium of $2002.00, which is about 242.08%." Another reason to leave this state. Problem is, this could start happening in other cities or states as well. Insurance companies are scum, and if you work for an insurance company or sympathize with them in any, don't try to convince me they're not.
Many years ago I worked for a large European insurance as an inspector and did some claims investigations. Fraud was endemic from customers and we had to be so careful. The company had a policy 'think of the company first, customer second" so we had to try and screw the policy holder, or lose our jobs.
The rationalization is that Florida has more than half of the nation's insurance claims.
I work for an insurance company, and I concur with your assessment. But don't forget, they are aided and abetted the law (or the gubmint).
Where are you going so where the rates will not rise as much on another property with the same market value?
Really? I am in L.A. did the insurance company tell you why are doubling your premium? I am paying $800 a year now for my homeowners insurance
Florida appears to be headed towards a "live at your own risk" state, where insurance in unobtainable.
I have been thinking about self-insuring.
So, thx Michael for discussing this topic and doing the leg work!
I'm sure a lot of people are gonna start considering this as a class goes up. Glad you found this video useful Kim!
When I pay off my home I will self insure and invest $6000 per yr. I'll keep my flood policy which is only $400 a year and maybe get a small policy for my contents (ie renters ins). What would be an interesting sequel to this video is to find out if any banks / credit unions allow their mortgage customers to self insure, esp if the customer can offer proof of funds from 401K or brokerage accounts, that could cover any damage to the home.
Renters ins is super cheap. 25$ a month maybe?
I've never heard of any mortgage companies or banks, allowing anyone to self insure. Although you made a good point that if someone has the net worth or proof they can pay on their own. I don't see why they wouldn't.
@MichaelBordenaro you can with car insurance..well, I remember a time that you could self insure.. you get a certificate thru the state showing you have proof of funds. I guess I'm not sure you can still do that. I'll have to Google it. Maybe you can do that with a mortgage. I bet if mortgage insurance get too high they could start allowing that with mortgages, then self insuring wouldn't only be for people that have paid off their home.
@@MichaelBordenaro Why would such people not use their funds to pay off their mortgage as soon as the fixed rate runs out?
@@oneukum With a mortgage rate under 3% it doesn't make sense for some people to pay off their mortgage when you can earn 8-10% invested in equities.
I've watched several of your videos and I really enjoy them, brother. I'm in Canada and things are slightly different up here, but the fundamentals of what you discuss are the same.
I recently received a letter from my insurance company. They are not going to renew me because of the proximity to the coast. Lol. I’ll be self insured.
Your math at the end is completely wrong because it assumed that you pay off all 5 claims at the end of the 30 year period or you have the money outside of the $6000/year to fix your issue without touching the portfolio. If you had an issue in year 6, you would likely need to draw down your self-insurance stock portfolio in year 6 which would then mean you don’t end up with $658k in year 30.
I realize the math may end up different in the end. If you need to make a claim or two. That's not really the point. It's just a simple exercise and I kept it simple on purpose. Of course if you have to make a claim your nest egg at the end will be smaller, but the net result is the same. You'll still end up with something rather than nothing.
Was wondering if I was the only one who recognized this risk. Any one of the claims he discussed would wipe out 2+ years of contributions and greatly lower the 30 year value. The power of compounding is in TIME. I modeled having to draw down the entire balance after 2 years and that alone lowered the end balance by ~10%.
Here's another data point to consider. Michael's 7% is below the historical average but that 7% is higher than the last 23 years. I modeled $500 a month starting in January 2020 through May 2023 in the S&P 500 ETF (SPY) with dividends reinvested and ignoring inflation. The final result is $500,645, substantially below Michael's calculations.
One last statement here. Michael's 7% average over 30 years also doesn't take into account inflation on costs. So, to assume those 5 claims would be at today's nominal dollar value in 30 years is an incorrect assumption. And, the worst case scenario is to have your $500k home (worth how much in 30 years?) completely destroyed requiring a rebuild any time during this period. You wouldn't have the funds, even 30 years from now, to do so unless you could do a majority of the work yourself AND pass city/county inspections..
The TOWN took it in my brothers case here in Maine. The town, and they put it up for auction and sold the water frontage part of it for $10,000 to a neighbor of ours and would not sell it to us his relatives.
Evil
In 2021
Michael, great show. We just made the self insure move. DeSantis never talks about this insurance nightmare. Only discounts for baby strollers and Sun Pass discounts. Wow what a leader. The legislature, although Conservative, still sides with the insurance companies. Next move will be leaving this state and also the country. Nice presentation.
Get the highest deductible available. Use only for a catastrophe. The insurance companies hire thousands of attorneys that will look for anyway not to pay. Insurance is a scam.
I agree!
Wow Michael🤗💗 88.1K!!!!
So proud of you 🙂
Hey Miss Lisi 💗
Thanks Laura! Inching closer to 100k 👌
@@MichaelBordenaro you deserve all wonderful things Dear 💙💚💛
When will you be in Cali? It's really nice in San Diego. Not sure on the homelessness there.
Great content! Buying and living on a yacht in Miami, is looking more cost effective and feasible.
thank you Michael for doing these videos, i look forward to them everyday. I always learn something new. Well done my friend!
Thank you I'm really glad to hear that. I always hope everybody goes away with at least one nugget of wisdom from each one of these videos.
My State Farm agent once told me flat out that if I ever made a claim, they'd drop me! She was referring to homeowners' insurance.
All totaled, I have had nearly a dozen hurricane hits on my Florida properties. In Indiana, my basements filled with water a dozen times between 2 homes. One house took a direct tornado hit. Then straight wind and hail hit it. Then my third Indiana house burned with $160k claim. Then my second Indiana house I live in got straight wind roof damage, hail damage a few times and basement filled at least 5 times. The tornado damage replacement roof on first house was put on sloppy by supposed pro and that caused thousands in water damage a few years later. Of all these events, I only claimed the tornado, the fire, one hail, one hurricane, and 2 straight wind events, all in the last 19 years. About $230k total damages paid by insurance companies. Probably 25 other events that I just ate it and fixed it all myself. Stuff happens.
Dang you’ve had bad luck
Michael, Good information! No, you were not advocating but without the knowledge people can't make an informed decision. You were providing the knowledge and options. Thanks.
I've self-insured my FL single-family residence since I purchased it in 2011. Last year, Citizens quoted a rate of $700 for bare-bones basic coverage, $100K liability, no windstorm. With windstorm it would have been $1800. Citizens was the only insurer that would cover me (and that's with a new roof, electric panel, and wind mitigation report). Citizens only offers liability at $100K. I don't carry flood insurance. AllState just quoted $700 for a $1 million liability-only policy.
Glad you spoke up on this. A lot of people seem terrified of this idea of self insuring.
I LOVE how you play out these things I wonder while driving and don't ever get around to researching. You go through all the things I was wondering about.
But Michael, the CEO's bonus is what's important, don't ya know. - Snark
Yeah, can't forget about that !!
I decreased my homeowners big time by going to liability. Included in my policy was replacement for everything such as the hot water heater, washer/dryer, dishwasher, oven, etc. TOTAL replacement cost. I didn't need that. My question is, if you stop your insurance and want to pick it up again later, would your premium be higher because you've been without? They always ask you if you are currently insured and w/ who when you get quotes. I read at one time that insurance rates are higher if you cancel and then pick it up again. If your insurance company requires you to replace your roof, even though it doesn't need it yet, in order to continue your policy, think about that. You can put away over $10,000 towards your self insure. That's huge. Think about this as well: when there is a major storm w/ damage in your area, you can apply for assistance. Ron DeSantis did this when Ian hit Ft Myers.
Yes, unfortunately they always charge you more if you were without insurance for a time. yet another scam of the insurance industry.
@MichaelBordenaro I thought as much. 😊
This isn’t right for everyone but it makes a lot of since. I would like to add that most Florida houses are made of concrete block and dont have as much wood as homes in other parts of the country. One reason people need to consider insurance more if they have an overly expensive home. For most average or or slightly less than average homes its worth considering not having any or just liability coverage
Thanks for shedding light on this topic!
No problem!
Here in the PNW I always hear how insurance companies won’t insure you if you have a wood stove, or they’ll drop you. For some people and homes, it’s a way of life. Nothing like driving away all that rain with a toasty fire.
My house would burn down 10 minutes after I started self insured.
Mr. Lucky.
😆
Well and the constant fear of that happening year after year is not with it. You want to be able to sleep at night knowing that you’re covered from a catastrophic event against your property…. It’s about the peace of mind
@@stablecable2068 This is Florida. Your $660 in Florida is $5,000.
Rush Limbaugh said the same thing on a program I listened to years ago..
It's getting to point you have enough money to cover any lost you may suffer to replace your home! It's going to take years to get that money to cover your lost till you get to that point. Great video and some really good advice! Thanks
I wonder how many insurance claims are initiated by landlords vs owner/occupant? Betcha landlords account for a super majority of claims. Why you ask? Because landlords never foot the bill. The tenant always does. Homeowners I know only pay for homeowners insurance because they have to. They’d never even think of filing a claim for fear of retaliation
Insurance: Fear sells…until it doesn’t. Insurance is a scam/pure greed anymore. Medical,dental,home and more. Why would I want to work my life away to insure something that may not even happen just to put money in someone else’s pocket? I’d rather walk away/self insure.
Your numbers need to adjust for when the claim comes in. A claim in year 1 puts you in debt, not having a claim until year 10 or 20 or whatever had different returns.
Yes, I realize that but for simplicity sake, I just left it like this as a what if scenario
Wonderful analysis for many of us. Thank you.
Self insured for over 10 yrs. Property in a trust held by an llc in the Canary Islands
You’re show is so similar to I Allegedly. Well I think you are both chocked full of personality and put on a good show. The only difference with your show is you are full of very useful information and great advice. Basically what I’m saying you’ve got content! Thanks
My experience. Pay insurance for years. Then need to file a claim. Then have to fight the insurance company to get them to pay for just the majority of the claim. The rest out of pocket. Screwed again.
Yep, you and so many others....
My friend sued liberty mutual insurance for roof lowball payout & won an extra 6 figures on top last year!
And I thought my homeowners insurance was high at $866/year in Michigan! 🤣
OH... One more thing.....Insurance is nothing more than the old " protection racket".....In Life don't "BET" against yourself...OK...now I'm Finished....(lol)....Thank you...
haha good one! Just like the mob 😆
This is an excellent video! I was lucky and downsized. With the equity was able to pay cash for my much smaller home here in Florida. I am self insured. Insurance here in Florida is a scam. I do have liability insurance (umbrella) with state farm. But I do believe this is your most informative video as of date, great job!!!
Thank you Brian I knew people like yourself would enjoy it !
"Self-insurance" is always cheaper--otherwise insurance companies would not "make" money. The issue is really whether you can afford to weather a catastrophic loss without insurance, and how long you require insurance. If you are younger and can afford to pay out-of-pocket, then insurance makes no financial sense. But if can't afford to pay out-of-pocket a large expense, or you are 75 and don't have a lot of years left, then insurance makes more sense.
good topic choice about self insuring
If you have enough money, you can easily self-insure but as you said, your home should be paid off and keep the money in an index or money market fund. You need to set aside enough to cover a complete loss of your home, which most people cannot do.
Insurance companies when dropping your coverage after 30 years of collecting your premiums:
Thanks for money, dummies! *SNORT*
Another great channel we discovered, awesome, will send next.
I live in Phoenix My house is valued at $340,000 built in 2004 and my homeowners insurance is $700 a year.
Maybe that's why everyone is moving here
My sister lives there really What's going to Happen ?? Her elect Bill 2Ksq Ft $130 per month x 12=🥰🥰🥰🥰
@@jimshoe402 you pay nothing for heat in the winter
@@stuartstein8062 She's on the budget program every month.i'm sure min bill plus hot-water tank ..😁😁😁
I would do that if I owned a home without a mortgage.
Kudos, Micheal, for the research. I self-insure, 7 feet above sea level in St. Pete. Flood, wind, and fire would be $14,000 annually. People here who have insurance are afraid to use it because they know the insurers will raise their rates if they do (and game down their claims anyway). Pay the insurers if you must; if you don't have to, fear is a thief.
As long as the person is disciplined I think this would be a great idea. Thanks for sharing your thoughts. Look foward to your next video. Much love from San Francisco, Bay Area.
Hey thanks, appreciate that! Looking forward to making videos in your neck of the woods this summer 👌
@@MichaelBordenaro Looking foward to your CA trip and the content you make while here. I’ll definitely be on the look out for you when you arrive. Would be cool to see you making one of your videos. I’m pretty close to wine country ( North Bay Area). Im born & raised and currently work in San Fran. Chat soon my friend. Keep the amazing content coming.
Nice job!! One of your best videos ❤
Thank you!
As others have commented what if you have a catastrophic event or even large damage just a few years into self insuring? That would or could put you into a situation you can't get out of or tens of thousands behind so it would destroy your savings model. It also depends greatly on many other factors, my home is on a dangerous curve with regular accidents. 15 years ago drunk came barreling into my garage, $40K damage to my home and $42K my vehicle. All paid except deductibles. Another scenario, if you may need to take out a reverse mortgage in retirement, they check your credit scores and if you've kept up to date with paying your home owners insurance and property taxes, if not and bad credit, no reverse mortgage so you are forced to sell your home because you can no longer afford it.
Better think twice, not an as easy decision as it's made out to be. And as you stated, the vast majority of people will not have the discipline to put that money away and will spend it instead, or will need it for the inevitable emergencies.
That sounds like a really good plan. Wish I thought of it 30yrs ago but the problem is 30yrs ago I had a mortgage and still do so the mortgage company requires it and I'm guessing no way to get out of that. It would be nice to have that much money saved after all those years especially since I've been paying home owners insurance for 35yrs and never had a claim!
Good insight on self-insurance!Best to think outside the box!😎
Another great video!
Glad you enjoyed it!
Yes my favorite!
I'm with you young sir 👍👍
I moved into a new build development in Texas and had a hail storm demolish my 6 month old roof. The cost of the new roof was $38,000
I was told that it was the second storm in 5 years here that demolished the roofs.
Interesting idea. I think discipline would be the key factor here.
Thank you for doing this topic. I own the same very nice mobile home for 17 years. I left the state of Florida and rented it for 2 years. The insurance for a homeowner is different than from a rental. Suffice it to say, when I returned to the property, I am faced with a LOT of obstacles to get the insurance back. The alternative is Lloyd's of London which charges more than double what Citizens' costs. In my area (North Florida) we have had very dangerous lightning storms barreling through. (My place is paid off. Insurance is optional.)
Yes....if u decide to drop coverage...they won't let u back in.. I made this point before. All these home owners should sell if they decide to drop coverage n move to another state. It's just a matter of time before u come out of pocket... It's self insurance... Michael can work the numbs such that one can be a big loser too
@@danman1287 I think I made a good decision to drop my homeowners' insurance after34 years and no claims. But I'm in N. FL, on fairly high ground for FL. And Michael forgot to factor in the fact that deductibles make homeowners' even more expensive. I always had a fairly high deductible all those years, and would've had to meet my deductible anyway, before insurance would pay for any damages I could've had.
@@commonsense6967 that remains to be seen. If u don't have money in reserve u don't self insure. U sell n move. People do this with healthcare too between 55-65. When a home FL is not insured I almost never buy it unless it's priced like a foreclosure at bottom of RE cycle. U can't get insurance again after u drop it...this is FL. Good luck ...hope u have a stash of money ready to pay contractors.. most people drop insurance Bec they can't afford it not Bec they made actuarial decision.
The real issue is not the cost benefit ...but people can't afford to live in FL... U need to make more money.
@@danman1287My plan is to self-insure, and I always had 5 to 10% hurricane deductible to save on insurance premiums, anyway. So yeah, I've always known I have to keep money in reserve for potential damages. State Farm told me I'd have to go through underwriting again if I wanted insurance again, meaning my old house, built in 1961, would have to meet their standards. More BS that I don't miss. And I've never even thought about the insurance status of a house I m interested in buying, because no matter what, I pay a good contractor or home inspector to thoroughly go over everything and hopefully fix any problems before I sign the deal. Insurance has nothing to do with what shape a house is in.
@siouxrose Make sure you don't have any big trees near your home. I once had half a huge Live Oak fall on my roof right over my head! (I was in bed!) No damage, really, it only tore off half a shingle, but the roof beams on my house are big planks. Stay safe!
The insurance situation is getting dicey, like everything else these days.
No kidding, it seems like just a few short years ago, most things were doing OK. Now its all insane.
They can’t take your equity for unpaid taxes. Property goes up for auction and any amount over the bills due is returned to the owner
I actually use this investment strategy and it works great, I only wanted to add a correction, you don’t pay capital gains tax on long term investments , you pay a much cheaper rate of tax , capital gains is for short term investments under a year.
I dropped my homeowners insurance 15 years ago after they raised it for five years in a row. I put $2,400 in the market and it just kept going up from there. Now they want $6300 to insure my house. I have $101,000 in that account now. I make an automatic deposit each month.
Michael I hope you are well. Amazingly, my wife and I just bought a house in St Johns County Fl.
Since we paid cash, we were just discussing self insuring the house. Your video and videos are always on point. You actually gave us the numbers we needed to make an educated decision. If you are wondering why we bought now, well, we have passed up on a ton of houses waiting for the bubble to burst. But we simply couldn’t pass on this one. Too perfect of a house for us. If the market drops, well, it drops. Anyway, thanks for your dedication to helping your listeners with really valuable information
Good subject matter. I agree, 99% of homeowners can’t/won’t self-insure. Those that can must keep up with inflation. Better option: Buy and hold stock in these insurance companies. Why do you think Warren Buffet owns GEICO? 😏
Very interesting MB! Paying off the mortgage early just in order to take advantage of that choice, may really save
$. Thanks for the math lesson, ive been too lazy to figure it out but was like "hey, wait a minute"
Insurance companies are in business to make money.... and most of them do quite well.
Buffet makes a lot of his money in the insurance business.
Thats right!
My home insurance only $1200 per year
For fire and liability only
No earthquake or sunami
Or flood coverage
Lucky!
I did this for 10 year on a number of rental houses in Florida. I calculated that over that period I could have one house destroyed over the period which would be the same as all the payments. Just took liability and put in a company.
I live in Naples Florida and I now self insure. I don’t put 6k away but I am putting away 3500.00. I buy CD’s but may look into your idea of investing in the market. The CD’s have to be renewed every 6 months which is not a big deal. The average is 7% overall but a big turn down could really affect your investment. Something to think about.
By no means am I saying that anybody should invest all their money into the stock market. It is volatile I only mentioned this is the example because that's what most people do.
The first couple years we were in our house, we got hit with a huge hail storm. Self-insured sounds good, but if you don't have that money already saved, one would be taking out a second mortgage to have a roof. It's gambling. Look at all the hurricanes. FL homeowners could lose everything.
I am going to start a homeowners insurance company where the policy is 10% 25% 50% the current premiums in FL. How? If house is damaged. I would pay the insured 10% 25% 50% of their recovering cost. Sounds silly? Not if you own the house, no mortgage, and/or are filthy rich.
We went self insurance 5yrs and for us it was the best thing we did. I told my wife when we pay this house off the insurance company is going to start raising the premiums, and at that time we paid $2500yr and insurance started raising it $500 a yr before we cut ties. We we're ok going into retirement with over $10k a month tax free/disable vet . Our mortgage payments $600 a month at the rate the insurance company was increasing the insurance was going to exceed the monthly payments,so we brought the bank out and we save over $30k in interest to the bank. Owning a home outright is worth it 😊
Nice!
Related to the 94 year old woman that lost her house and getting some of her equity back. It has always been like that in Palm Beach County. Years ago my friend lost his house due to not being able to pay the mortgage so it was auctioned off. He was incarcerated so I helped him get a lawyer who petitioned the court. Although he didn't end up with much he did get a little bit of money from his equity after the lawyer and lender was paid.
A complication with self insuring or NOT buying homeowner's insurance: If you are a high/highish net worth individual, you arguably need liability insurance in some form. As far as I know (ask an insurance expert), umbrella policies also known as "excess liability insurance" generally require a given amount of homeowners insurance (maybe $300,000 depending on the policy?) and "insure over" your homeowner's and auto liability policies. It might be possible to find an umbrella that works differently. If so, it's likely more expensive than say, $300 per $1,000,000 of umbrella coverage.
Right...all these nutjobs saying liab insurance is cheap blablah. It's Bec they require other insurance in front position. Misinformation galore by idiots. They think there is a free lunch... insurance is all about math .. n I doubt the avg joe has the math skill of actuaries... They just want to believe Bec they don't have the money.
A very important point. Especially since homeowners will cover the cost to defend a suit.
@@cap9115 can't assume people have thought this thru lmao
SP5 hundred has gone up about 7% per year +2% dividends. I have been in the S&P 500 Index fund since 1985…each dollar I invested at that time is now worth $42 or if you reinvested dividends it is worth $60.
It just keeps raising. At what price doesn’t it make sense to afford the insurance? In 10-15 years from now could insurance cost $15,000 to $25,000 a year?
I probably will self insure if I were stuck with Citizens because it is insolvent as they insure far too many people.
If you can self-insure up to higher and higher deductible, at some point you maybe able to self-insure at some point. I would always keep liability, perhaps at a higher deductible. You'd still need to have a paid-off mortgage, as any mortgage would require coverage.
U should really consider moving if u can't afford insurance... Self insurance only works if u have the money in reserve..
My wife and I purchased a 1,000 sq. Ft fixer in NE Fl back in 2016. Relocated from Cali and have replaced everything in the home. One major claim after hurricane Mathew to the tune of 16K to repair damage from a tree that fell on the house. Whew! Our insurance is $130/mo. and we have the federal flood insurance to boot. That runs 600/ yr. Interesting concept to sel insure. We have evacuated 6 times and decided to purchase property in N Carolina in the event we need to relocate or bug out during a storm. Still fixing that place up but at least we can camp in comfort in a beautiful mtn. top area. No flood worries. The price we pay to live near the St John's River close to St. Augustine. Beats the fire and earthquake worries in San Diego County mtns.
Got to wonder what is next?
Anyone who’s got a mortgage can’t self insure. The mortgage lender requires it to protect its interest. Eliminating everyone who has a mortgage doesn’t leave a lot of people to participate in self insuring. I wonder what percentage do? I’ll bet it’s much less than 10%.
I said that in the beginning of the video
@@MichaelBordenaro I know you mentioned about insurance being required by lenders. I was mainly wondering if there’s any data on how many or what percentage of homeowners actually do self insure.
I think that thing used to be called savings.
I’ve been meaning to get to this video for a few days. Can’t believe what I’m hearing, v good, you’re like becoming an investigative reporter. Excellent. That’s what everyone should be doing. The Bible says so too…as good Bereans, to prove all things! (Sadly, sob, most in country are under Mind Control. Heard that term for years, not completely knowing what that was. Found out, in the last few years…it’s believing false information, whether mainstream, etc., whatever).
He wants real believers to follow the Truth, which is Him. Good Job, Michael B. Channel….you get a 🌟 ⭐️ 💫 Star….Stars. Keep on this Narrow Path as Jesus said…it will lead to all truth. (Done preaching now….) ✅😀
But, now, we’re holding our breath, as you’re About To Drop Your Investigative Findings. I bet the ins co’s are not hurting. And we know you’re about to say this, as we see from the title of the video. We paused the video to write this comment. Great Job. All heaven is smiling too, bel it or not, it’s true, when one, seeks, investigates, and then Finds! We will probably be in shock at what you’re about to say, but we suspected it. Pt. 1