Dave Ramsey says: Keep homeowner’s insurance in case of disaster

Dear Dave,

Recently, I made a claim on my homeowner’s insurance for hail damage. It was my first claim ever.

Since I’m retired and completely debt-free, including my home, and have over $1 million in the bank, is homeowner’s insurance still a good idea?

The house is insured for $250,000, with a $5,000 deductible, and the insurance is about $1,200 a year.

– Mary

Dear Mary,

You’re obviously in good financial shape, but I’d still recommend you have an up-to-date homeowner’s insurance policy.

If something happened to my home or one of my rental properties, I could write a check and replace any of them. But I still have homeowner’s insurance on every single one.

It’s just good risk management to transfer the chances of a fire, tornado, or other catastrophic events to homeowner’s insurance.

If something disastrous happened, you could write a check to cover the deductible with no problem. But writing a check for $250,000? You’d feel that one.

Keep the policy, Mary!

— Dave

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