Definition of "Self insurance"

Shelayna West, Owner real estate agent

Written by

Shelayna West, Ownerelite badge icon

West Premier Home Group-
Keller Williams Legacy Realty

Protecting against loss by setting aside one's own money. This can be done on a mathematical basis by establishing a separate fund into which funds are deposited on a periodic basis. Through self insurance it is possible to protect against high-FREQUENCY, low-severity losses. To do this through an insurance company would mean having to pay a premium that includes loadings for the company's general expenses, cost of putting the policy on the books, acquisition expenses, premium taxes, and contingencies.


Need help as a:

I'm interested to:


I work in:

Reach out to the local professionals for help
I agree to receive FREE real estate advice.

Agents, get listed in your area. Sign up Now!

Here's what you'll get:

1. Full zipcodes coverage for the city of your choice for 3 months

2. The ability to reach a wider audience

3. No annual contract and no hidden fees

4. Live customer support/No robo calls

$75 - Any City - 3 Months Coverage
loader gif

Please wait ...

I agree to receive FREE real estate advice
I agree with Terms & Conditions and Section 5-5.9.

Comments for Self Insurance

Charles Scoma Charles Scoma said:

Our company is in the business of constructing homes. We own some 25 houses we lease. We are willing to cover the cost of reconstruction of the leased properties as a the limit of insurance. However here in Texas there are two ways insurance companies write policies - ACV (actual cash value) and 80% coinsurance. We would like to set up a trust account to self-insure the properties. What are the tax imprecations of a trust fund as the third party insurer of our properties?

Aug 13, 2018  16:55:11

Real Estate Agent


we believe there are several complications to your plan. A self-insurance is typically used to protect against damages that are frequent but are not substantial price-wise. Home construction damages are usually not inexpensive; we're not even sure if it's possible because of labor union's rules etc. We suggest you talk with an accountant about the tax implications of self-insurance and also with a real estate lawyer to check not only if it's possible but viable. Good luck!

Aug 14, 2018  11:03:37
image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.


Popular Insurance Terms

Discharge of electricity from the atmosphere, one of the perils covered in most fire insurance policies. ...

Termination date of coverage as indicated on the insurance policy. ...

number of people born as a percentage of the total population in any given period of time. ...

Expenses connected with resolving an estate to include medical expenditures, funeral expenditures, probate expenditures, estate taxes, legal fees, and other administrative expenditures. ...

Sections with standard wording common to all property and casualty insurance contracts: conditions, declarations, exclusions, insuring agreement. ...

Tax charged to finance the old age, survivors, disability, and health insurance (OASDHI) plan. Both employer and employee share in the cost, making contributions on an equal basis. The ...

A fire division defines the act of breaking up a building into well-defined separate parts. They can also use an artificial division line from incombustible building materials. Often, ...

Same as term Expiration: termination date of coverage as indicated on the insurance policy. ...

Agreement by the insurance company to keep the universal life insurance policy in force, even if the cash value becomes zero or less than zero, provided that a specified minimum ...

Popular Insurance Questions