Many American homeowners are gambling that they won’t experience a disaster and forgoing purchasing home insurance, according to reports.
Why it matters: The risks of skipping on homeowners insurance are significant.
If you experience a disaster, you don’t just lose your house and belongings. You might be on the hook to pay for removing your home’s remains and all the rebuilding costs.
The big picture: The Wall Street Journal reports that many Americans skipping on insurance say they can no longer afford the rising premiums. Others, particularly the affluent, say they have enough money saved to rebuild or move should their home be destroyed.
- Amy Bach, executive director at the consumer-advocacy group United Policyholders, told the WSJ it’s a growing trend. More people who own their homes outright or who have inherited a house are opting to drop insurance. Bach says that’s because people cannot afford the rising home insurance prices.
By the numbers: Bankrate reports the national average for home insurance increased 20% this year to $1,428 based on $250,000 in dwelling coverage.
- 12% of homeowners in the U.S. don’t purchase homeowners’ insurance.
What they are saying: “It is a risky proposition to go without home insurance, and you need to fully understand the financial consequences if you lose your home,” Noah Damsky, a financial adviser in Los Angeles, told the WSJ.
Go Deeper: Read more about Americans bailing on insurance at wsj.com, including how wealthy individuals are finding creative solutions. (Subscription may be required)
