There's only one scenario where your home would potentially not be worth insuring. That's when you can afford to pay for all damages and liability yourself, no matter what.
If you’re fortunate enough to be in this situation, it means you likely have millions of dollars at your disposal. After all, it's not just your physical property you need to worry about, it's also the liability. Your home might be worth $500,000 but an injury someone sustains on your driveway could cost you ten times that in damages.
The common misconception about home insurance is that it's all about protecting your home. That's part of it. But the main purpose of insurance is to protect you.
It doesn't matter if you live in a seven-figure mansion or you have a one room shack you're planning to tear down. If you don't have home insurance, you don't have any protection against liability concerns.
If you own a piece of real estate that you feel isn't worth the monthly insurance payments, you have a few options:
1. Sell it. Even if the market hasn't hit the peak you were waiting for, sometimes the smartest decision you can make is to drop an investment that's just costing you in the long run.
2. Level it. If the home itself isn't worth keeping, you might be better off with a vacant lot you can sell.
3. Develop it. If you've been meaning to spruce up your fixer-upper for awhile, the sooner you get on it, the better.
You are legally allowed to own and live in a home without insurance, but it's almost never advisable. Whatever you spent buying your place, whatever you've spent over the years on repairs and additions, it can all be gone in minutes should you suffer a house fire or hurricane damage. You're legally allowed to live in a home without liability, but one claim from an injured visitor can have you paying the damages for decades to come.
So, the short answer about when a home isn't worth insuring is simple: Almost never.
If you can cover all the damages out of pocket, if you can cover liability out of pocket, and if you don't mind footing the bill should it come to that, then sure, you can get by without protection. But only a select few are fortunate enough to be in this position. For everyone else, it's never really a good idea to go without.
Also Read: 3 Costly Home Insurance Mistakes Putting You at Risk