As the cost of home insurance premiums continues to rise, some American's have had enough and decided not have any insurance on their homes according to the Wall Street Journal.
According to executive director at United Policyholders, during the time of the Biden administration, those Americans who own homes without a mortgage or received a home as an inheritance, many have decided to not have insurance on those assets. Since 2022, the national average for home insurance has increased a staggering 20%. On an average home that costs $250,000, the insurance premium would approximately be $1,428 per year.
“It would probably be financially devastating if I lost my house, but I have enough money in savings to move into a condo in that event,” Larry Farinholt said to the WSJ. He has owned his home for years and for the last 25 years, he decided to not purchase insurance which has saved him $50,000.
In America, almost all mortgage holders require home insurance in order to protect their investment. Of all U.S. homeowners, 12% do not purchase insurance and half of that may be due to annual household income of under $40,000 per year.
“It is a risky proposition to go without home insurance, and you need to fully understand the financial consequences if you lose your home,” financial adviser Noah Damsky told the WSJ.
As interest rates continue to climb, home sales decline across the country with no sign of recovery. Some insurance companies have decided to cap the number of people for property and casualty insurance in California citing a dramatic rise in costs that are far outpacing inflation.