I thought about this too some time back. Then my home, cars, well; everything I own other than the clothes I was wearing, burned up in a California wildland fire. I'll never look at insurance the same way again. An insurance policy pays for more than just the value of your home. The clean up alone cost me over $100,000 in order to even start rebuilding. If I didn't do it, the government was willing to step in and do it, then bill me for it. The house was on a hillside. The clean up so destabilized the soil, I had to pay for an engineer and soil compaction to stabilize the soil as well or pay for any sediment runoff into any local streams and the necessary work to evaluate if my run off was indeed damaging the water ways.
Then there's the 'loss-of-use' where the insurance policy covers the rent of everything from house to all it's furnishings; forks, towels, beds and bedding, you name it. If it was in the house or of the house, they paid for the loss of use until those things are replaced. This cost is above the value of the house and the value for clean up, permits, etc. and had no dollar limit, only a 2 year time limit. They even paid me for costs above and beyond my normal everyday expenses. For example, we had to dine out instead of cooking our own meals until set up in the rental. The difference between our normal grocery bill and our cost for food is covered under 'loss of use'.
I'd have to say that for every $100,000 of home market value, the insurance company paid us $200,000. Personal property alone is 70% of the home value. Landscape, property improvements such as septic, fencing, pavement/driveway/sidewalk, any barn, outbuildings, etc are all covered as percentages of the home's value. I owned a lot of collectables all covered.
Please really look into what it would cost to replace your home, not what your home is worth. They are two totally different things when you are considering self insuring. And for those who are wondering how much they should insure for, ask a contractor what it would cost to demolish your existing home and replace it down to the scorched earth. Then add 70% for the possessions and land improvements and you might break even on a total disaster claim.
Note also that if an uninsured driver plows into you, you probably cannot buy Uninsured/Underinsured Motorists coverage if you don't have Liability. Just 2 months ago someone with no morals grazed the side of my car when it was parked out in the street across from DS' house, and left no note. $3,500 worth of damage plus the cost of a rental car while it was in the shop. UM covered all but a $500 deductible.
