OK, assume $200k/loss. It would take 400 policy premiums to make up
the direct loss. Assuming the ancillary costs are 100% of that would
still be under 1000 paid premiums _per annum_ to make up for the
one-time infrequent loss. I don't have data at hand, but I'd venture
the percentage of US homes having a full loss annually is far less than
one in a thousand. (Only to point out things may not be so bleak for
the underwriters as you seem to be trying to make us think... )

Where homeowners' underwriters tend to have problems is not in
individual home policies but in areas prone to widespread disasters
such as flood, hurricane, earthquake, etc., where a whole region gets
hammered at one time. Unfortunately, as they were reminded in the Gulf
and FL the last few years, one can not apply the individual recurrence
interval per household in a region independently for common-cause
events and remain actuarially (sp?) sound over the long haul.

nevertheless the premiums MUST cover all costs and some profits so the
business can remain in operation. lets not forget theres probably a LOT
of overhead running a insurance companies, agents fees, commisions,
underwriters, investigators to find fraud, let alone inspecting and
managing repairs so people cant steal by covering stuff up.

anyone who has had a claim knows what a hassle between contractors,
insurance company and mortage company...........

now most probably SHOP for lower cost coverage, who volunteers to pay
more to cover fires and perhaps shock hazards from old obsolete K&T
wiring