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re: Hurricane vs wildfire insurance about to be nonexistent
Posted on 1/9/25 at 1:19 pm to fareplay
Posted on 1/9/25 at 1:19 pm to fareplay
quote:
what do we do with insurance?
I could see the payout value being capped. I would think the property and contents value vs premium becomes more lopsided at higher property and content values requiring coverage
0
Posted on 1/9/25 at 1:19 pm to jizzle6609
quote:
Gotcha. So where did we fail here? Is it because we have had too many disasters? Or has inflation pushed costs up so quickly there's not enough time between disasters to have the liquidity to cover all the damages timely?
In Florida, two things have happened to improve accessibility and rate over the long term. That is rate activity/law reform, and changes to building code.
The problem hasn’t been more frequent storms, it’s that we’ve built up tremendously in high risk areas. Every insurer has a potential maximum loss cap, and when they approach that, they either stop writing or restrict writing to brand new construction that meets strict guidelines.
In CA, companies have needed to take rate to match price to risk, and the government has said no at every turn.
Posted on 1/9/25 at 1:22 pm to Geauxldilocks
quote:
Ever heard of Mt St Helens in your state?
Ash doesn't destroy a house.
And it's been 44 years. Prior to 1980 it last erupted around 1850.
The 1980 eruption destroyed only 200 homes in close proximity to the volcano.
So, you think the entire state should have volcano insurance?
Posted on 1/9/25 at 1:22 pm to fareplay
quote:
guess my question is more on the lines of if nobody can be insured, does it mean it kills towns
The government would have to step in to provide insurance similar to what Florida had to do during the sinkhole epidemic.
Insurance companies have to explain to the state why they're pulling out.
This post was edited on 1/9/25 at 1:23 pm
Posted on 1/9/25 at 1:24 pm to LSUFanHouston
quote:
But what about the family in St Bernard parish who wants to move out because of rising insurance costs, but no one will buy their home because of rising insurance costs?
Lower the price to offset the insurance expense demanded for living in a high risk area.
Not sorry.
Posted on 1/9/25 at 1:24 pm to DCtiger1
quote:
The problem hasn’t been more frequent storms, it’s that we’ve built up tremendously in high risk areas. Every insurer has a potential maximum loss cap, and when they approach that, they either stop writing or restrict writing to brand new construction that meets strict guidelines.
Here's the issue.
The people that developed first are now getting hammered because the people that developed later came in and pushed insurers to their limits. But the newer construction gets the better rates, while the original development takes it in the shorts.
It's like having a house next to a railroad. If you build or buy a house next to an existing railroad, I don't feel sorry for you. But if you built or bought first, and then the railroad is built, I can understand if you are pissed of about that.
Posted on 1/9/25 at 1:27 pm to BuckyCheese
quote:
Lower the price to offset the insurance expense demanded for living in a high risk area.
OK.
Then how do you afford the higher house price in the safer area?
Remember in many cases this also involves trading a 3 percent mortgage for a 7 percent mortgage.
Not to mention, even if you lower prices, you don't guarantee a buyer. Buyers are staying away because even at lower prices, they don't want the future risk.
Houses here have dropped prices 40-50 percent and are still sitting. Becuase buyers are scared of even higher future premiums... or even the future availability of insurance.
Posted on 1/9/25 at 1:29 pm to LSUFanHouston
quote:
The people that developed first are now getting hammered because the people that developed later came in and pushed insurers to their limits. But the newer construction gets the better rates, while the original development takes it in the shorts.
I get the sentiment. However, I saw 1980-1990 homes completely demolished by Hurricane Michael and right next door a 2017 home with minor damage. Building code makes a huge difference in risk pricing.
You can get a significant discount if you have opening protection on all glazed and non glazed openings, including your garage door. Our new home has tie rods from the foundation all the way through the top plate on the second floor, every three feet of the exterior walls. The exterior walls are also 2x6 vs 2x4.
Posted on 1/9/25 at 1:31 pm to LSUFanHouston
quote:
OK.
Then how do you afford the higher house price in the safer area?
Buy what you can afford.
quote:
Remember in many cases this also involves trading a 3 percent mortgage for a 7 percent mortgage.
Irrelevant. Or are you asking for a subsidy?
quote:
Buyers are staying away because even at lower prices, they don't want the future risk.
Sounds like the home were vastly overvalued. Are you suggesting those owners be made whole by "someone"?
Posted on 1/9/25 at 1:33 pm to DCtiger1
I would be willing to bet that more carriers would be open to writing in California if they would be allowed to take a little rate here and there and if the state would do just a little bit to mitigate these fires from happening. It's not climate change, it's ridiculous leadership worried about killing a few mice in the grass fields during the mitigation process
Posted on 1/9/25 at 1:35 pm to Gator5220
'fair plans' exists in several states already, including California. basically insurer of last resort program administered by the state but funded / shared proportionally by all insurers in the particular state. any company operating in the state has to agree to participate in the fair plan. essentially just super expensive catastrophic coverage.
pooled catastrophic plans for high risk areas likely will be the way forward, along with much tougher requirements on homeowners to fortify their houses. things will no doubt have to change.
pooled catastrophic plans for high risk areas likely will be the way forward, along with much tougher requirements on homeowners to fortify their houses. things will no doubt have to change.
Posted on 1/9/25 at 1:35 pm to Teddy1388
quote:
I would be willing to bet that more carriers would be open to writing in California if they would be allowed to take a little rate here and there and if the state would do just a little bit to mitigate these fires from happening. It's not climate change, it's ridiculous leadership worried about killing a few mice in the grass fields during the mitigation process
Correct. There’s also a lot of bullshite going around. Most policies were not non-renewed. They simply stopped writing new business
Posted on 1/9/25 at 1:38 pm to BuckyCheese
quote:
Are you suggesting those owners be made whole by "someone"?
I am simply saying that “just sell and move” is a vast oversimplification and an insult to any reasonable level of intelligence.
No one is asking for anyone to be made whole or subsidized
Posted on 1/9/25 at 1:38 pm to fareplay
Tell them they shoulda bought a house in arkansas.
Posted on 1/9/25 at 1:38 pm to DCtiger1
quote:
DCtiger1
I see.
Appreciate the feedback.
Posted on 1/9/25 at 1:40 pm to DCtiger1
quote:
However, I saw 1980-1990 homes completely demolished by Hurricane Michael and right next door a 2017 home with minor damage. Building code makes a huge difference in risk pricing.
That explains why the newer construction insurance cysts may be less.
That doesn’t explain the skyrocketing cost of insurance for the older structure, or companies non-renewing policies on the older structures
Posted on 1/9/25 at 1:49 pm to Dragula
National Parks
Posted on 1/9/25 at 2:07 pm to LSUFanHouston
(no message)
This post was edited on 2/7/25 at 10:48 am
Posted on 1/9/25 at 3:10 pm to LSUFanHouston
quote:
That doesn’t explain the skyrocketing cost of insurance for the older structure, or companies non-renewing policies on the older structures
Sure it does
Posted on 1/9/25 at 3:13 pm to jorconalx
quote:
Sure it does
I mean it's blatantly obvious.
Unless the guy owns one of those older houses and simply doesn't want to face reality.
Just like screaming things aren't fair and when it is pointed out the only solution to his "problem" is subsidies, only to claim he doesn't want subsidies.
This post was edited on 1/9/25 at 3:14 pm
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