Insurance is just plain stupid!!

[Rich Weese]

There are posters on this board with the knowledge I need to make a decision and I'm ready to pull the plug. I want the pros and cons on my dilemma.
On free and clear property, is fire insurance a good or bad INVESTMENT?
What are the odds insurance companies use to price your policy?
How often are they paying out on a claim?

I'm spending thousands per year, not to insure the lender (who doesn't exist) but for this nebulous potential return. Should I buy lottery tickets with the money instead? Which has the liklier pay off?

I've owned OVER 1000 sfrs and have had exactly ZERO claims for fire damage. I don't even KNOW of someone who has personally had a fire claim. Yet I pay thousands down the hole every year. I have the funds to re-build if I had a fire without insurance. I have all the liability insurace for falls, etc.
It seems to me that insurance on free and clear property is like life insurance for a single man whose heirs have enough for funeral costs without the insurance.
Anyone have the statistics on the risk? For me, this fire insurance gimmick has been a lousy investment.

Rich

[Timothy W.]

You're kinda right Rich. For your situation, standard insurance is just plain stupid (I mean that respectfully). I don't say this of anyone else on this forum but you need to be on "the next level" of property insurance. No major corporation has a $500 deductible. They self insure for a large retention amount and have insurance after that. You should probably have yourself set up on high retention property insurance. Insure your own first ____ dollars (fill in the blank with your comfort level) and have insurance for what is over that. I handle the claims for several companies that are set up in such a manner. You probably don't want just self-insurance (BP can tell you why), you need some coverage if the big S really hits the fan. But when it's just small S hitting the fan, you can handle it.

This is something that is beyond a standard insurance agent but if you like, I can point you in the direction of some organizations set up specifically for the high retention insured and self insured. This would be the best resource for you to consult on how to do this right. I'm driving around Chicago today. Let me look when I get home. I made a list and I know I've got it somewhere....

Tim