My insurance decision? Am I missing something?

[Mike H.]

I'm currently at a reliable/well-known insurance company.
My agent is very good and my coverage is pretty decent.
My deductible is 1,000 and I'm at replacement cost with
some pretty significant amounts above what I actually owe.

The being said, my rates have really gone up considerably in
the last year. I was paying $500 to 700 a year and I now seem
to be getting rates from $700 to 1,000.

My biggest problem is the replacement costs are out of whack.
A house I bought last year has a replacement cost value of 250k.
I am all in 88k. I really see no reason to use insurance as
a lottery ticket. And my real estate company can't lower replacement
cost to what I want.

I just want to make sure I can pay off my mortgage and have about
10k to 20k to take care of the lot. But I also want to make sure
if I have any small to medium claims, I'm not coming out of pocket.

Found another insurance company - from a lead on here - that
has cheaper coverage because they'll let me drop my replacement
coverage amounts to something more reasonable.

It should save me about $300 a month (currently paying about 1k a month).

They make it real easy to add houses and cover houses that are vacant
and/or need rehab which will be convenient for my hard money lender requirement.

Am I missing something? Is there a risk in not having the actual replacement cost to rebuild the house? I know that I could get a windfall if
a house would actually have a complete loss event but is that really
where I want my $300 a month going? Waiting for that to happen?

The other big downside to switching is that the deductible on
the new plan is 3k and thats as low as they'll go. The deductible
on my current plan is 1k.

I've only had one claim in the 4 or 5 years I've been doing this and
have 15 total houses. So I'm not sure the deductible is really a big issue.

But it does mean I may end up coming out of pocket a little if I had
a small fire or some wind damage.

If you could help clear some of these options up, it would be much appreciated.
I'm leaning toward the new carrier because of the ease to adding properties
and the monthly price savings. I'm still insured in case significant damage occurs. But if its something minor, a 5 or 6k repair, its going to cost me $3k versus 1k with state farm.

Then again, 4 or 5 years with 1 claim, the 3,600 a year I save will cover the the extra 2k in deductible.