Comment by monster_group

By catastrophic loss I mean an event that has the potential of causing bankruptcy (such as house burned to the ground). Home insurance rates vary a lot depending on where you live so our math is likely very different and we both could be right. While a big expense in one shot definitely pinches more, paying higher premiums every year, the annual premium hikes, in addition to raised premium for subsequent years due to filing a claim can also add up to a lot surreptitiously.