I heard a statistic on the radio this evening, the Marketplace program on an NPR station.
You have about 88% of people that do carry it, as opposed to a few years ago where it was about 92% to 95% of people that had homeowners insurance,”
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In Florida they tell us homeowners are paying up to $6K for homeowners insurance and $4K for flood insurance where required for a total of $10K. Vs an average $1800/yr across the country.
Some are deciding to drop insurance but you can lose everything if a storm hits. Smarter to sell and move somewhere safer. Only the wealthy or those enamored with the shore and lifestyle remain. Ditto rising insurance costs in the forests of California and places at high risk like Hawaii.
We hope they win this lottery and don’t have losses. But taking the risk uninsured to most of us is simply foolishness. Surely most people have more sense than that.
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I’m pretty sure that your mortgage lender is just going to buy HO and Flood insurance policies for you at a much higher cost and add it to your monthly payment. Lenders are already adding the expected cost of insurance to the qualification criteria for getting a home loan. Maintenence and repair costs won’t be far behind.
intercst
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Idalia to not get HO insurance.
ralph misses the old HURL board.
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Only people without a mortgage can opt to drop insurance.
It’s already here! I got an absurd quote of $9,800 for homeowners insurance a few months ago, so I shopped around and found a ~$7,000 policy and switched. A few weeks in, they sent someone to take photos with a cute little drone. Then I received a letter listing deficiencies that require repair/maintenance within 45 days. It was trivial stuff like fixing small segments of rotting fascia board that I was planning on fixing anyway once the weather got cooler. Instead I did it in the summer heat. Wasn’t a big deal to fix, and I had to fix it anyway eventually.
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AI drones are the future in insurance, and they won’t only be examining your fascia.
intercst
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Same thing happened to me when I switched to GEICO. They told me to replace our roof - which some areas did need to be addressed. Entire new roof cost me $14K. If I had not done it, they would have dropped me.
'38Packard
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You might imagine that drones will also check for nearby fire fuel that might let fire spread. Remove, pay the price, or risk drop of coverage. Or maybe mortgage foreclosure unless you find insurance somewhere at some price.
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I’m in IL (western suburbs of Chicago) and just received my renewal and it’s doubled; going from 2,400 to just over 4,800. Zero claims. I’m looking at increasing my deductible to 5k or even 10k.
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Insurance is a profit making business. Heavy losses mean they need more income.
Should we blame it on global warming?
Or merely no free lunch?
Our insurance, for both home and vehicles, went up 50% this year, without any triggering event, either for us or the region. Our taxes have increased 20-30%/year, over the past 6 years, which admittedly tracks the increase in value. Increase in value is possibly also the cause of increase in insurance, though we do keep the home value current on our insurance, but this was the first year our rates were impacted. Insurance broker shopped our policies around and found everyone went up 50+%.
Historically, I have been all about real estate as an investment and it has done VERY well for us. We have however been in the process of dispossessing ourselves of most of our real estate, as the risk from extreme events, difficulty of hiring contractors, and burden of maintaining ourselves, starts to outweigh the benefits. Sold our rental 1.5 years ago, with no capital gain tax as we had lived in it for the first 2 out of the five years owned. A month after we closed on the sale, a tree fell on the house. A month later, the sewer backed up into the house. Bullet dodged.
Our primary home goes on the market this Spring, not to close until end of April, giving us 2 years in between the sale of our rental and primary so that we can again be eligible for the up to $500K capital gains exclusion. And we should come close to that, given the insane price increases since we bought in 2019.
For the time being, we are moving our things that we want to keep to our vacation home, which provides a great storage area downstairs and a 1 bedroom apartment upstairs for us to stay in between travel. We did 5 weeks in Asheville, NC and 7 weeks in Pittsburgh, PA this summer, (wow, is Pittsburgh great!,) paying less for a 2 bedroom furnished rental with all utilities included than we do on our primary residence on which we have a 2% mortgage. Crazy fun way to live in retirement, and to figure out where we want to settle down eventually, when we will probably put our vacation home up for sale, not to mention much more fun than spending our time maintaining our homes. Next home will be maintained for us, either a condo, rental, or patio home with an HOA. Or we will help our kids buy a home with an in-law suite for us.
Real estate has been great for our accumulation phase, but am happy to take the profits and run to play.
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