Insurance is one of the highest costs of owning a home in the Florida Keys. Because of that, more buyers—especially cash buyers—are asking a big question:
“If I don’t have a mortgage, can I skip homeowners insurance and save money?”
The short answer: Yes, you can self-insure. But it’s not always as simple or as safe as it sounds.
Let’s break it down in plain language so you can decide what’s right for you.
What Is Self-Insuring, Anyway?
Self-insuring means you take on the financial risk yourself instead of paying an insurance company to do it.
In other words, you become your own insurer.
You save the money you would have spent on premiums and keep it in a reserve fund. If something happens, you pay out of pocket.
Simple idea. Big responsibility.
The Possible Pros of Self-Insuring
1. More Buying Power
Skipping a large annual premium may free up money you can put toward a higher purchase price or a better home.
In a competitive market like the Keys, that feels tempting.
2. No Insurance Company Rules
No inspections. No four-point reports. No renewal surprises.
You don’t have to worry about your policy being dropped or your rates jumping.
3. You Keep the Savings—If Nothing Goes Wrong
If you go years without a major loss, the money you’ve saved can grow.
Some buyers like building their own “rainy-day fund” instead of paying an insurer.
But Here Are the Cons Buyers Often Overlook
1. One Event Can Wipe Out Years of Savings
This is the big one.
In the Florida Keys, storms and flooding are not rare. A single hurricane, fire, or plumbing leak can cause tens or hundreds of thousands of dollars in damage.
If you self-insure, that bill is yours—on the spot.
2. You Still Pay for Repairs AND Temporary Living Costs
If your home becomes unlivable, homeowners insurance usually covers hotels or short-term rentals.
Self-insuring means you pay for repairs and a place to stay while repairs drag on.
3. Resale Could Get Complicated
Future buyers may want an insurance history on the home.
If you repaired storm damage out of pocket, there may be no claim record, and some buyers (and inspectors) may be wary.
4. You Need a Big Cash Cushion—and Discipline
True self-insurance requires a large, dedicated reserve fund, often six figures.
If the money isn’t set aside or gets used for other needs, you’re exposed.
5. HOAs, Condo Associations, or Local Rules May Still Require Coverage
Even without a mortgage, you may be required to carry certain policies—especially flood or windstorm insurance—depending on where you buy.
6. Peace of Mind Has Value
Insurance is expensive, but so is stress.
Self-insuring shifts all the risk to you. For many buyers, that burden feels heavier after the first storm season.
A Middle-Ground Option: Partial Self-Insurance
Some buyers choose to carry:
Windstorm insurance only
Flood insurance only
A high-deductible policy to reduce premiums
This way, you’re not fully exposed but you still save money.
So, Is Self-Insuring a Smart Way to Increase Buying Power?
It depends on your financial comfort level, the location of the home, and your risk tolerance.
Self-insuring can stretch your dollars today, but it can also expose you to huge expenses tomorrow.
If you have the reserves and the stomach for risk, it may be worth exploring.
If not, traditional insurance—or a hybrid approach—may give you better long-term protection.
The most important takeaway:
👉 Self-insuring is not a discount. It’s a gamble. Know the odds before you play.
