At what damage amount should I pursue a homeowner's insurance claim?
Some builders -- if given the first chance to deal with the problem, instead of being presented with a bill after the fact -- will fix the problem at no charge to the homeowner.  Good faith matters. My house was built by such a builder.  If I have a problem that I am competent enough to diagnose and fix, I fix it myself, at my cost.  If I have a problem that that I cannot diagnose and fix myself, but that I think the builder (or his subcontractor) is competent enough to diagnose and/or fix, I contact the builder (or subcontractor directly).  I am willing to pay for the diagnosis and/or fix, especially if it is an aging or wear-and-tear issue, or the logical consequence of a cost-saving measure that I voluntarily chose when the house was being designed. If the problem is a plumbing problem, I contact my preferred plumber for a diagnosis and/or repair.  I pay for my preferred plumber's work.  On two occasions, my preferred plumber was unable to fix the problem.  Both problems turned out to be installation (or testing) errors related to work done specifically for building inspections.  In both cases, I paid for my preferred plumber's diagnosis, and the builder (and/or his subcontractor) fixed the problem at no additional cost to me. The diagnosis and repair work that you describe seems like a similar situation to me.  (In fact, I had my builder's subcontractor replace a few prematurely damaged shingles on my roof.  This repair prevented a roof leak.  I noticed the problem while trimming a tree back from the roof.  The shingles were damaged because the building permit implied that the tree could not be trimmed back.  I'm spotting a pattern with these problems…) In my opinion, the alleged problem with the roof pitch seems like a design flaw that should have been obvious at the time you chose the house design.  I expect that any corrections of this design flaw will need to come out of your remodelling budget.  In the absence of further details, I doubt that either the builder or the homeowners' insurance company is responsible for it. Some builders make a point of minimizing the warranty work they pay for, regardless of its effect on the builder's reputation.  I do not know which kind of builder you have. The lawyer has probably told you whether the relevant statutes of limitations have lapsed.  (The statutes of limitations vary from state-to-state, and vary depending on the alleged tort.)  Starting a lawsuit is likely to further damage your relationship with your builder. Homeowners' insurance companies now share the number of claims that have been made historically at each property address.  Most insurance companies now use this cumulative number of claims when setting rates, even if the claim(s) were made against a different insurance company, or by a different homeowner.  I do not know whether any insurance companies ignore claims older than a certain number of years, or ignore the first claim.
The reason people buy earthquake insurance is not because normal insurance goes straight to the lender (it does not) but because oftentimes earthquake damage is not covered under normal homeowner's insurance. Natural disasters are often not covered under regular insurance. This is why people buy flood insurance. If your pipes burst and flood your house, your home owner's insurance will typically cover. If the local river floods and floods your house, oftentimes insurance will not cover. This is why a lot of state/federal agencies have separate pools of insurance. All earthquake insurance in California is technically through the state agency, though you may go through your homeowner provider to get it. I pay $200 a year for mine, I wouldn't say it's very expensive. My concern is not a giant earthquake that destroys my house. My concern is a large earthquake that might cause cracks in my slab or structural damage that my regular insurance is in no way obligated to cover but I need to fix. I think if you live in an earthquake prone area it's as reasonable as getting flood insurance if you live in an area known to flood. "No one has addressed the fact that your loan interest and property taxes are ""deductible"" on  your taxes? So, for the first 2/3 years of your loan, you will should be able to deduct each year's mortgage payment off your gross income. This in turn reduces the income bracket for your tax calculation.... I have saved 1000's a year this way, while seeing my home value climb, and have never lost a down payment.  I would consider trying to use 1/2 your savings to buy a property that is desirable to live in and being able to take the yearly deduction off your taxes. As far as home insurance, most people I know have renter's insurance, and homeowner's insurance is not that steep.  Chances are a year from now if you change your mind and wish to sell, unless you're in a severely deflated area, you will reclaim at minimum your down payment." Your calculations are good as far as they go, but there are lots of other factors and pros and cons to each decision. Yes, you should certainly compare the monthly rent to what your mortgage payments would be, as you have done. Yes, you should consider how long you might live there. If you do move out, how difficult will it be to sell the house, given market conditions in your area? If you try to rent it, how difficult is it to find a tenant, and what rent could you expect to receive? Speaking of moving out and renting the place: Who will manage the property and do maintenance? Would you still be close enough to do this yourself? Would you be willing and able to spend the time? Or would you have to hire someone? Also, what if the tenant does not pay the rent? How difficult is it to evict someone in your area? Speaking from personal experience, I own a rental property in Ohio, and the law says you can evict someone with 3 days notice. But in practice they don't just leave, so then you have to take them to court. It takes months to get a court date and months longer before the police actually show up to order them out of the house. And you have to pay the lawyer and court fees. In that time they're living in your property rent free. In my case one tenant also totally trashed the place and stole everything that wasn't nailed down -- I had to spend $13,000 on repairs to a house worth a fraction of what you're talking about. Being a landlord is NOT just a matter of sitting back and collecting rent checks: there's a fair amount of work and a lot of risk. What do you have to pay the realtor, and what other closing costs would you have to pay? Where I live, realtors typically charge 6 to 7%. You may also have to pay for an appraisal, title search, and bunch of other little fees. Mortgage interest is deductible on your federal income taxes. Rent is not. If you own and something needs to be repaired, you have to pay for it. If you rent, the landlord has to pay for it.  If you own, you can do pretty much what you like with the property -- subject to zoning ordinances and building codes and maybe homeowners association rules, but you should have a pretty good amount of leeway. If you want to install ceiling fans or remodel the kitchen or add a deck, it's up to you. If you're renting, it's up to the landlord to decide what you can do to the property. And if he agrees to let you do some upgrade, when you're done, it belongs to him. With a condo, you are not usually responsible for exterior maintenance, like mowing the lawn and trimming the bushes and washing the outer walls. With a house, you are. You might pay someone to do this, which adds to the cost, or you might do it yourself, which takes time. Insurance on a condo or aparment is much less than insurance on a house. In my area, anyway. You should investigate those costs. If you buy, eventually you own the place and don't have to pay a mortgage any more. If you rent, you continue to pay forever. (Even if you don't live in the same house forever, as long as you don't take a terrible loss when you sell you should then have some money left over to apply to the next house, so you are still building equity.) Some of these pros and cons are easily quantifiable. Others are probabilities, like how likely is it that your water heater will fail?, and how long is it likely to take to find a buyer if you want to sell? And others are pretty subjective. Can you afford to replace it? What does that mean?  Even if insuring means overpaying, it does spread the risk.  NB: This example is not about the Applecare program, which I think is a waste of money for many people. Others have explained very well if it would work for you or not.  I have a Macbook but no Applecare. I have an expensive smartphone with insurance for dropping and water damage, but not theft. After one year I cancel this insurance. I don't have $200K in my bank account. There are two scenarios that I see. You have a mortgage on the property. Generally the insurance company sends the funds to the lender, who then releases the funds to you  as you make the repairs. They do it this way because if you never make the repairs the value of the collateral is decreased, and the lender wants to protect their investment. There is no mortgage. You will get the funds directly, and the insurance company will not force you to make the repairs especially if the repairs are cosmetic in nature.  In either case if you don't fix the cause of the leak, and make repairs to the site around the leak, you will run into a problem in the future if the leak continues, or the rot and mold continues to spread.  If you file a future claim they are likely to ask for proof of the original repair. If you didn't make it, they are likely to deny the second claim. They will say the cause is the original incident and if you had made the repair, the second incident wouldn't have happened. They are likely to drop you at that point. If you try to sell the house you will have to disclose the original leak, and the potential buyers will want you to make the repairs. Any mold or rot spotted by the home inspector will be a big issue for them. It is also likely to be an item that they will be advised to demand that you get a legitimate company to make the repair before the deal can move forward, and won't negotiate a lower price or a credit for $x so they can get the repair done. Some will just cancel the deal based on the inspection report. In the US you can get a home warranty when you buy a house that will cover major repairs for the first few years of owning a home.  The costs vary based on age and the results of the home inspection.  Ours cost ~$250 a year.  This was put into our closing costs.  Unfortunately this market does have some disreputable companies that come im with prices that seem too good to be true.  As is usually the case they are.  Do research on the company you are getting the home warrenty from to make sure you are dealing with a reputable company that will honor its commitments. By having 20% down you will avoid needing Mortgage insurance which will save you a considerable amout.  My PMI cost me about $70 a month. However once you get to 20% equity in your home the pmi drops off.  So if you can put down 15% you should be able to get out from under your pmi in a few years if you want to keep that 5% cushion while making extra payments. The question is how much do you feel you need.  So far owning a 70 year old home my extra maintence costs have been around 2500 a year.  But they seem to be in 1k chunks every 4 or 5 months. There are several aspects to this but at a high level it boils down to A lot goes in to insurance rating and risk projecting.  You can't adjust a single variable and expect a proportional change in your premium, 7,000 miles per year just won't be 70% of the cost of 10,000 miles per year, because there are a lot of other things in play as well.  To further address premium adjustments.  Consider this: Even if your liability coverage did scale with perfect correlation to your mileage (using the same 70% from above, 7,000 miles per year versus 10,000 miles per year) then your premium composition is: $200 to $170 is 15%.  No change will have a direct linear correlation to your total premium because there are different component pieces of the total premium.  Fixed costs may be built in to the amounts for other component pieces of the premium, for example maybe no line of coverage ever has a cost below $X. Obviously these numbers are all made up Additionally, and also less considered is the fact that your liability also scales because of a lot of factors that have nothing to do with you.  It might be the other cars that are on the road, it might be that more densely populated areas have more fender benders.  For example if you live in Beverly Hills you have a much higher likelihood of accidentally bumping a $70-$80-$90-$100k+ car than you do in say, rural Wisconsin.  If your zip code is gentrifying and everyone starts buying Mercedes, your liability coverage increases.   You can not adjust one single variable and decide that you are lower risk than all insurers think you are.  If you shop this coverage and all insurers are within a nominal margin of pricing for the same coverage levels, there isn't much to argue with; you are simply riskier than you think you are and the variable you are focused on is not as meaningful as you think it is. I believe your statement is mostly correct:  ...all the expert recommendations are based on an inflexible conventional wisdom that presumes that all renters are relatively resource-poor. When you purchase a $50 electronic item at the store and are offered an extended warranty for $3, most people turn it down, not only because they don't think it's worth it, but also because in the event that the item fails between say years 1 and 3, they don't worry enough about that $50 to care if they have to buy a new one, or live without it. The percentage of your net worth also matters. For example, if you had an entire loss tomorrow, you'd be out $20K if you needed to re-purchase your possessions. (30K minus 10K in current coverage.) $20K is approximately 1/44 or 2.3% of your net worth. If a catastrophe occurs and you only lose 2.3% of your net worth, some might consider that lucky, so from that point of view it isn't really a big deal. But on the flip side, if the extra insurance only costs you $50 more per year, you may not even notice that dent in your net worth either. I think for most people, the value of items in their home may be their net worth, or at least a much larger percentage of it, in which case the insurance makes more sense. For someone in your position, it probably doesn't make much difference either way. If you had $300K in valuables in your house, perhaps your point of view would be different.