4 ms·

Lots of people where I live can't get their current homes covered by home insurance, as a fire destroyed 1,000+ homes a few miles away in a matter of hours. Ar

Lots of people where I live can't get their current homes covered by home insurance, as a fire destroyed 1,000+ homes a few miles away in a matter of hours. Are these people to abandon their homes outright?

mjhay 3y ago
They don't need to abandon their homes, but those homes are becoming uninsurable without heavy subsidies (like FEMA flood insurance). Houses should simply not be built in many of these places.
tekla 3y ago
They don't have to, if they don't feel they need insurance.
- kgwxd 3y ago
  Isn’t it usually required if you have a mortgage?
  - toast0 3y ago
    I can't remember the specific terms of my mortgage, but as I recall, the first level was 'you must have home insurance with certain parameters including having us as a named insured, etc; if you don't, we will obtain home insurance at your expense'. But I don't know what the recourse is if home insurance is unobtainable. Certainly, it would be a lot harder to get a new mortgage underwritten, which makes refinancing mostly impossible and makes selling difficult. Given that the property would be difficult to sell, I'd imagine even if the contract allows it, lenders wouldn't foreclose for lack of insurance if insurance is unavailable. Really, I think the way to move forward on the issue that so many homes are built in areas they shouldn't be is to make available insurance policies that cover permanent relocation, rather than rebuilding in place. You can still live there until it burns down, at which time, you must move elsewhere and the lot is deemed unbuildable for the forseable future. With some sort of provision to manage windfalls from changes in conditions allowing safe construction in the future. (It's not fair if you force people out, but ten or twenty years later, let people in again; OTOH, maybe one hundred years later, it will make sense?)
    - bdowling 3y ago
      > But I don't know what the recourse is if home insurance is unobtainable. The recourse is usually foreclosure when the borrower doesn’t meet the essential terms of the mortgage agreement. It doesn’t matter why the borrower can’t get insurance any more than it would matter why the borrower couldn't make payments on the loan.
      - prepend 3y ago
        For my mortgage the terms are that the bank acquires insurance and charges me, not that they are allowed to foreclose.
- Schnitz 3y ago
  They have mortgages that require them to have insurance.
01100011 3y ago
Maybe. Or maybe if their municipality got serious about fire breaks, fire prevention, and invested in their fire department they would be insurable again.
- justinator 3y ago
  No is even sure what the original source of the fire was, after a very long investigation.
  - lmm 3y ago
    Does it matter? The problem isn't that the fire started, that's always going to happen sometimes, the problem is how much it spread and how much damage it did.
semicolon_storm 3y ago
The situation sucks, but their continuing to live there and be insured has to be subsidized by somebody somewhere. The area is clearly insanely risky to the point where no premium justifies offering coverage. If coverage was offered, who should be the one subsidizing it? Private companies? No way, they never would. Government? That's just a regressive policy funneling money to a relative well-off (homeowners) group of people.
- bushbaba 3y ago
  There’s always a premium. Even if 30% of home value per year. The issue is the fair price for risk isn’t something people would want to ever pay.
  - frumper 3y ago
    Nor should they. If they could pay that ridiculous rate then they wouldn’t have a problem not having insurance. You’re presenting it as someone that buys a 300k house and gets a $1500/mo mortgage doesn’t “want” to pay $8500/mo in home insurance.
    - xref 3y ago
      It’s better insurance just isn’t available at any price. You can know going into the purchase that the home will be uninsurable so your financial picture needs to account for that. Also in general I don’t believe you can get a mortgage without home insurance? So people buying these properties would have to come in cash.
- justinator 3y ago
  >but their continuing to live there and be insured has to be subsidized by somebody somewhere I think insurance companies cover customers because the customers pay for the insurance. You're saying that because profits for insurance companies aren't at the level the insurance companies want, that they can say - because it's illegal to own an uninsured home, where people can and can not live? That seems like an overreach of power of a private company.
JumpCrisscross 3y ago
> Are these people to abandon their homes outright? When they next burn down, yes.
usernew 3y ago
about a decade ago, purchased a home half a mile away from a river. For the last 50 years, the river bank has been has been slowly moving outwards out due to erosion. I bought the house for a million, it's now worth two. Last year, a thousand houses a few miles downstream fell into the water. This year, my insurance company cancelled my coverage, and I can't find anyone else who will insure me. What I'd like is for premiums to be raised for people who bought their homes in a safe area, to pay me my million dollars in profit when my house falls into the watter. This is my Current home. Am I supposed to just abandon it because no one will buy it? So, the answer to your question, is yes. Home prices go up and down. Yours is now worth zero because of your bad decision. It is not the job of other people, to pay you for your mistake.
- deleted 3y ago
  [deleted]
- scarface_74 3y ago
  Why should others subsidize your investment lost?
  - NLPaep 3y ago
    He says he’d like that, but that it wouldn’t be fair
  - usernew 3y ago
    they should not. the fact that you did not understand this is what I was saying, suggests a lack of practice in social interaction. now this is not meant as a personal attack. think of it like this: you are teaching an arithmetic class - something for which fully functional members of society need to have the skill. you explain that 5+2*2=9. someone corrects you that it is in fact 14. what would you suggest this person do? this also applies to basic language skills. i suggest that whatever advice you have for the previous hypothetical person, you apply to basic social interaction in your own life. but maybe I'm wrong, and you did not read the comment to which I was replying. in that case, I suggest that when you read a comment, you should see the comment it's rebutting, prior to posting yours. this also, is a basic social skill. I'll start you off: I do not own a house at all as I travel internationally and move around too much to stay in one place over a few years. I would also never purchase one in a risk zone, since there are thousands of others available w/o the risk, and they don't cost more.
emodendroket 3y ago
Usually the answer is "they should just sell" though less clear is to whom.
NegativeK 3y ago
The government could buy out the homes. There'd have to be restrictions to prevent abuse and the government buying 1M+ vacation homes (or whatever), but it'd make the problem go away.
draw_down 3y ago
[dead]

mjhay 3y ago

They don't need to abandon their homes, but those homes are becoming uninsurable without heavy subsidies (like FEMA flood insurance). Houses should simply not be built in many of these places.

tekla 3y ago

They don't have to, if they don't feel they need insurance.

kgwxd 3y ago
Isn’t it usually required if you have a mortgage?
- toast0 3y ago
  I can't remember the specific terms of my mortgage, but as I recall, the first level was 'you must have home insurance with certain parameters including having us as a named insured, etc; if you don't, we will obtain home insurance at your expense'. But I don't know what the recourse is if home insurance is unobtainable. Certainly, it would be a lot harder to get a new mortgage underwritten, which makes refinancing mostly impossible and makes selling difficult. Given that the property would be difficult to sell, I'd imagine even if the contract allows it, lenders wouldn't foreclose for lack of insurance if insurance is unavailable. Really, I think the way to move forward on the issue that so many homes are built in areas they shouldn't be is to make available insurance policies that cover permanent relocation, rather than rebuilding in place. You can still live there until it burns down, at which time, you must move elsewhere and the lot is deemed unbuildable for the forseable future. With some sort of provision to manage windfalls from changes in conditions allowing safe construction in the future. (It's not fair if you force people out, but ten or twenty years later, let people in again; OTOH, maybe one hundred years later, it will make sense?)
  - bdowling 3y ago
    > But I don't know what the recourse is if home insurance is unobtainable. The recourse is usually foreclosure when the borrower doesn’t meet the essential terms of the mortgage agreement. It doesn’t matter why the borrower can’t get insurance any more than it would matter why the borrower couldn't make payments on the loan.
    - prepend 3y ago
      For my mortgage the terms are that the bank acquires insurance and charges me, not that they are allowed to foreclose.
Schnitz 3y ago
They have mortgages that require them to have insurance.

01100011 3y ago

Maybe. Or maybe if their municipality got serious about fire breaks, fire prevention, and invested in their fire department they would be insurable again.

justinator 3y ago
No is even sure what the original source of the fire was, after a very long investigation.
- lmm 3y ago
  Does it matter? The problem isn't that the fire started, that's always going to happen sometimes, the problem is how much it spread and how much damage it did.

semicolon_storm 3y ago

The situation sucks, but their continuing to live there and be insured has to be subsidized by somebody somewhere. The area is clearly insanely risky to the point where no premium justifies offering coverage. If coverage was offered, who should be the one subsidizing it? Private companies? No way, they never would. Government? That's just a regressive policy funneling money to a relative well-off (homeowners) group of people.

bushbaba 3y ago
There’s always a premium. Even if 30% of home value per year. The issue is the fair price for risk isn’t something people would want to ever pay.
- frumper 3y ago
  Nor should they. If they could pay that ridiculous rate then they wouldn’t have a problem not having insurance. You’re presenting it as someone that buys a 300k house and gets a $1500/mo mortgage doesn’t “want” to pay $8500/mo in home insurance.
  - xref 3y ago
    It’s better insurance just isn’t available at any price. You can know going into the purchase that the home will be uninsurable so your financial picture needs to account for that. Also in general I don’t believe you can get a mortgage without home insurance? So people buying these properties would have to come in cash.
justinator 3y ago
>but their continuing to live there and be insured has to be subsidized by somebody somewhere I think insurance companies cover customers because the customers pay for the insurance. You're saying that because profits for insurance companies aren't at the level the insurance companies want, that they can say - because it's illegal to own an uninsured home, where people can and can not live? That seems like an overreach of power of a private company.

JumpCrisscross 3y ago

> Are these people to abandon their homes outright? When they next burn down, yes.

usernew 3y ago

about a decade ago, purchased a home half a mile away from a river. For the last 50 years, the river bank has been has been slowly moving outwards out due to erosion. I bought the house for a million, it's now worth two. Last year, a thousand houses a few miles downstream fell into the water. This year, my insurance company cancelled my coverage, and I can't find anyone else who will insure me. What I'd like is for premiums to be raised for people who bought their homes in a safe area, to pay me my million dollars in profit when my house falls into the watter. This is my Current home. Am I supposed to just abandon it because no one will buy it? So, the answer to your question, is yes. Home prices go up and down. Yours is now worth zero because of your bad decision. It is not the job of other people, to pay you for your mistake.

deleted 3y ago
[deleted]
scarface_74 3y ago
Why should others subsidize your investment lost?
- NLPaep 3y ago
  He says he’d like that, but that it wouldn’t be fair
- usernew 3y ago
  they should not. the fact that you did not understand this is what I was saying, suggests a lack of practice in social interaction. now this is not meant as a personal attack. think of it like this: you are teaching an arithmetic class - something for which fully functional members of society need to have the skill. you explain that 5+2*2=9. someone corrects you that it is in fact 14. what would you suggest this person do? this also applies to basic language skills. i suggest that whatever advice you have for the previous hypothetical person, you apply to basic social interaction in your own life. but maybe I'm wrong, and you did not read the comment to which I was replying. in that case, I suggest that when you read a comment, you should see the comment it's rebutting, prior to posting yours. this also, is a basic social skill. I'll start you off: I do not own a house at all as I travel internationally and move around too much to stay in one place over a few years. I would also never purchase one in a risk zone, since there are thousands of others available w/o the risk, and they don't cost more.

emodendroket 3y ago

Usually the answer is "they should just sell" though less clear is to whom.

NegativeK 3y ago

The government could buy out the homes. There'd have to be restrictions to prevent abuse and the government buying 1M+ vacation homes (or whatever), but it'd make the problem go away.

draw_down 3y ago

[dead]