Penny Wise and Pound Foolish

According to a recent article in The Wall Street Journal, homeowners are increasingly foregoing home insurance.  The risks associated with that decision are significant and should be fully understood before adopting the strategy.  

When you don’t have insurance and your home is destroyed, you don’t just lose your house and its contents, you might also be responsible for paying to remove your home’s remains. For most Americans, their home is their most important asset. 

Financial assets are difficult to insure and the cost may often prove to be excessive.  To forego insurance, on what may be your most important and insurable asset, is not only foolish, but represents poor financial planning.  

It is no secret that homeowner insurance premiums are going up, generally in line with the increasing costs associated with higher residence values and repair costs.  We recently noted this issue in our blog “Barn Raising”, posted on July 12, 2023.

Investors should consider the risks associated with all of their major assets and act in a prudent manner.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA