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re: Reprice of Louisiana Homes Due to Insurance Increases?
Posted on 5/9/23 at 2:28 pm to SaintsTiger
Posted on 5/9/23 at 2:28 pm to SaintsTiger
Nothing, initially.
Nothing would happen until people decided to start walking away from their homes. And, as long as they have a lot of equity, they won't walk away.
So, they will suck it up and cut other expenses. Or, they will just start borowing against the home - if they can - to pay it.
If I can borrow against a HELOC to spread a year's increase over 4-5 years, that will work for a while. Eventually that's unsustainable, but it will work for a while.
Nothing would happen until people decided to start walking away from their homes. And, as long as they have a lot of equity, they won't walk away.
So, they will suck it up and cut other expenses. Or, they will just start borowing against the home - if they can - to pay it.
If I can borrow against a HELOC to spread a year's increase over 4-5 years, that will work for a while. Eventually that's unsustainable, but it will work for a while.
0
Posted on 5/9/23 at 2:56 pm to fallguy_1978
quote:no because all the other states don't have the amount of top end corruption, cronies, lawyers all on the take, terrible business environment , etc.
That really could happen to almost all of the Gulf coast and the southern 3rd of the east coast.
Posted on 5/9/23 at 3:09 pm to Brobocop
quote:
Yeah because everyone wants to live in the booming metropolis that is Alexandria
This isn't as big of an issue some of the parishes farther away from the gulf, right? Like I can't remember any point in time where St. Francisville had anything more than moderate or light damage from a named storm.
I know places like Hammond, Baton Rouge, Lafayette, etc. occasionally get damage from storms, but it's nothing like the coastal parishes.
This post was edited on 5/9/23 at 3:15 pm
Posted on 5/9/23 at 3:30 pm to LSUFanHouston
quote:
The insurers are looking out for their bottom line, and the less they pay in claims, the better it looks.
The attorneys are looking out for their botom line, and the more they get the insurers to pay, the better it looks. No one is looking out for the actual homeowners.
Wait so both insurance companies and homeowners hire lawyers.
At the end of the day insurance companies are loyal to their shareholders, and the executives are major shareholders. They make money by not paying claims afaik.
Homeowners just want to fix their houses. They have to actually have real damages and documentation to win in court.
Posted on 5/10/23 at 8:56 am to LSUFanHouston
quote:
if she bought basically a gutted home, could be a real cheap mortgage.
Most likely either that or a tax sale. Either way, jealous of the note, but definitely not jealous of the location
Also, once she finished the renovations, what are the chances she had her insurance valuation updated to reflect the new replacement/repair costs (don't recall which term they use) when her insurance was only $175/month.
Posted on 5/10/23 at 9:00 am to LSUFanHouston
quote:
We are forced to carry insurnace because we have a mortgage. As long as there is enough money to pay off the mortgage, if a claim is made, no one should care if I have enough money to build a new house.
Problem with this is the coinsurance rules. House valued at $400k, mortgage is $200k, you carry $200k in insurance. Major storm comes through and causes $300k in damages; insurance will only pay $150k, less deductible and penalties; and you need to cover the remaining $150k+. Can't walk because even with that ~$150k, you still owe $50k+ to the mortgage company; so now you get to take out a construction loan since you no longer have equity due to the damages.
Posted on 5/10/23 at 9:06 am to Weekend Warrior79
quote:
Problem with this is the coinsurance rules. House valued at $400k, mortgage is $200k, you carry $200k in insurance. Major storm comes through and causes $300k in damages; insurance will only pay $150k, less deductible and penalties; and you need to cover the remaining $150k+. Can't walk because even with that ~$150k, you still owe $50k+ to the mortgage company; so now you get to take out a construction loan since you no longer have equity due to the damages.
are you sure it's not 50% times the limit of the policy of 200k in that scenario? Weird scenario since loss of claim was more than policy limits.
Posted on 5/10/23 at 9:21 am to Weekend Warrior79
quote:
Problem with this is the coinsurance rules. House valued at $400k, mortgage is $200k, you carry $200k in insurance. Major storm comes through and causes $300k in damages; insurance will only pay $150k, less deductible and penalties; and you need to cover the remaining $150k+.
I'm sorry, what are the co-insurance rules?
My understanding is that if you make a claim, the value the claim, subtract your deductible and in some cases depreciation, and then pay you the remaining claim, subject to you having enough coverage.
That's how it has worked for me the two times in my life I have made a claim.
Posted on 5/10/23 at 9:24 am to LSUFanHouston
we're trending more to 100% coinsurance life.
Lets say 500k coverage on 800k replacement cost house.
200k claim.
500/800= 62.5%. (37.5% underinsured).
200k claim times .625= 125k payout minus your deductible.
you need to know what the specific coinsurance requirements are on each quote/policy now. Times are changing quick. Old standard used to be 80%.
Lets say 500k coverage on 800k replacement cost house.
200k claim.
500/800= 62.5%. (37.5% underinsured).
200k claim times .625= 125k payout minus your deductible.
you need to know what the specific coinsurance requirements are on each quote/policy now. Times are changing quick. Old standard used to be 80%.
This post was edited on 5/10/23 at 9:25 am
Posted on 5/10/23 at 10:01 am to Chad504boy
quote:
are you sure it's not 50% times the limit of the policy of 200k in that scenario?
I was using extreme numbers since my company's claim could have been in that situation, but you are correct on the coverage vs valuation ratio.
Not an insurance guy just had a crash refresher course when it almost became a reality for our company.
This post was edited on 5/10/23 at 10:05 am
Posted on 5/10/23 at 4:08 pm to slackster
quote:
What’s absolutely killer is a mortgage on a $235k loan at 3% for 30 years combined with “replacement costs” that insure it for $325k or more.
It’s more like a $260k loan, 3% for 30 years. Can sell for $350k. Insurance says it needs to be covered at $480k. That’s why people complain.
Posted on 5/10/23 at 5:56 pm to Junky
quote:
Can sell for $350k. Insurance says it needs to be covered at $480k. That’s why people complain.
It’s also the inverse of this, too.
I insure homes for $600k-$850k that could go for $1mil+ Based on location/land/proximity to gulf.
Posted on 5/11/23 at 2:21 am to SaintsTiger
This tale started with the lie she is a homeowner, were she actually a homeowner she would have no mortgage and insurance would be optional.
Posted on 5/11/23 at 8:22 am to SaintsTiger
We have a situation where the price doubled and then the insurance company put a valuation of almost double the true value of the home and we can’t fight it. All deductibles are based on this inflated price, but there is no other option.
Complete bullshite.
Complete bullshite.
Posted on 5/11/23 at 8:43 am to Junky
quote:
It’s more like a $260k loan, 3% for 30 years. Can sell for $350k. Insurance says it needs to be covered at $480k. That’s why people complain.
market value has nothing to do with replacement cost.
but i do understand that it seems insurance companies are overdoing replacement cost estimators. I think some increases are valid and some are going a bit extreme.
Posted on 5/11/23 at 10:07 am to TigerGrad2011
quote:
We have a situation where the price doubled and then the insurance company put a valuation of almost double the true value of the home and we can’t fight it. All deductibles are based on this inflated price, but there is no other option.
Have you spoken with your broker about challenging the new valuation? Would require you to get a specific type of appraisal, but your broker should be able to drop your specifics into their system and tell you if it's worth fighting through the appraisal process.
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