Self insuring (house contents)

Lois_and_CK

I'm interested in self insuring instead of taking out contents insurance.

Do any other MSE'ers do this? How has it worked out for you?

huckster

Lois_and_CK wrote: »

I'm interested in self insuring instead of taking out contents insurance.

Do any other MSE'ers do this? How has it worked out for you?

I suspect that many people self insure for Contents. At one time I think statistics were that something like 25% of households did not have Contents Insurance.

It is up to you. Depends on where you live, what your lifestyle is like and what risk you are willing to accept for yourself. But then you already know that.

Another option, is to take out a policy that covers the basics, but with a largish excess. So you pay a smaller premium and cover yourself should anything major happen.

adamc260

Your able to buy contents policies from around the £60-100 mark.. Why would you want to self insure unless you have a very very low contents sum insured. All Insurance is the same... you wish you didn't have to pay for it, but in the event of a claim your glad you did.

mikey72

Even I pay for contents insurance.
One claim for £1000 every ten years and you're probably in profit.
One serious claim for £10000 in your lifetime and you're ahead.

having said that, I've never made a claim, so I'm about £1500 down now.

ian_h

You need to put yourself in the worst possible imaginable position and ask whether you could afford to reinstate your life.

Imagine a fire for example EVERY last possession you own is destroyed AND you have to pay for Alternative Accommodation, Now you may say all your stuff is second hand so has low value but are you sure you could find second hand again and could you afford to pay the price for new stuff. With the average home contents on a replace as new basis conservatively valued at somewhere between 30-40,000 you would need extremely deep pockets to be able to self inure.

dunstonh

Everybody takes the risk of self insurance in some area or another. However, I dont think I would do it with contents as covering it is dirt cheap.

Lois_and_CK

I'm really sorry it's taken so long for me to post thanks to those of you who took the trouble to reply. I've had my internet security settings too high and haven't been able to log in for weeks. Now sorted.

Anyway, I took your thoughts and advice on board and found a very cheap contents deal in the end. Some of you seemed to think I was daft for considering it, but I got the idea from Martin Lewis's home insurance article, and Alvin Hall also mentions in it one of his books, so I wasn't being totally stupid!

mikey72

Just so long as "very cheap" doesn't mean "very poor", I think it's probably the best choice.
It depends on what you own, and how often you claim. I'm still losing, but hopefully I'll stay that way.

System

You are confusing self-insurance with non-insurance.
Self-insurance means that you have a sufficiently large number of houses, cars, factories, etc that you decide they are unlikely all to catch fire, be stolen, suffer boiler breakdown or whatever in the same year so you simply accept the risk and spread it over all of them. Only one of your houses is burgled, only one of your factories burns down, etc, in any year so in effect that cost is your insurance premium.

Non-insurance is just a matter of taking a risk because the value of the items you are protecting is negligible compared with your income.

InsideInsurance

Self insured is when you actually put money aside to cover the losses not just having a large portfolio - though equity within the portfolio could be part of your insurance provision