Homeowners insurance and flood insurance questions

[Bayspieler]

I have a friend who is 65, long divorced and lives by herself. She owns her own home with no mortgage.

She's paying about $2,000/year in homeowner's insurance, and her home is insured for up to $65,000. If her home were to be destroyed, she does not plan to rebuild it. To me, this seems like a good reason to drop her homeowner's policy and essentially self insure. She said she's questioned the insurance company, and they will not sell her a leaner policy -- no higher deductible, etc.

A problem is that she lives in an area hit by Hurricane Katrina. She accepted a Community Development Block Grant which requires her to keep flood insurance on the property forever. That's not a big deal, but my question is: Can she keep flood insurance without also having homeowner's insurance?

A second issue is that while she's not too concerned about the house and contents, she's interested in keeping some level of liability coverage. Is it possible to keep just liability coverage on homeowner's insurance?

Thank in advance. I know it's not really a 'Savings Advice' question, but I'd appreciate any feedback the community could give.

[Drake3287]

Don't have any answers for you but I'd be afraid not to have any type of liability insurance in the case of someone getting hurt on her property. $2,000. a year for a $65,000 house is extremely expensive, even with flood insurance added. She can also think about buying a million dollar umbrella policy, I pay something like $350. a year for one.

[snafu]

I suggest she talk to an insurance broker who is not affiliated with a specific company and ask her house insurance be put out for bids from the big re-insurers. She needs to include details, the sum she sees her home's worth, less the value of the land the house sits on, personal liability, flood ins, etc less deductible. She can look up what houses of similar size in her district has sold at on Zillow for example and balance that with her property tax evaluation [less the land value]. Most of us also insure furnishings, appliances and electronics. If eligible, we get flood insurance and in this region we all need hail insurance. The agents will say anything to keep the commission they collect every year as part of the $ 2,000. she's been paying. Has she ever asked the agent how much she pays in commission each and every year, whether she even talks to him...the sum rolls in.