It is almost like we already have a home ownership crisis or or something. NYT in the clouds once again.
this post was submitted on 18 Dec 2024
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Clouds maybe, but they’re the ones talking about it, not many others.
What's going on here is that Sheldon Whitehouse, the Democratic Senator, held a hearing which made data about insurance drops and rate increases public. That's creating a news cycle about it
Hopefully it results in more Luigis.
I don’t wish misfortune on any person but, this is a good thing. Yes, there is a housing crisis, but part of that crisis is where and what we are constructing. If we are utilizing resources (whether it’s capital, labor, or materials) to reconstruct buildings every 3-10 years then those resources cannot be use to construct more sustainable housing.
Part of the problem is the way the flood insurance subsidization program works. Don’t get me wrong. Insurance needs to be affordable, but the program needs to adjusted so that when a claim is made in the highest risk areas, the payout is sufficient to relocate the insuree to less risky property, and the claimed property could be transferred to the department of the interior or other entity responsible for converting the land to a flood mitigation zone. (Likely reverting it back to the wetlands that were drained to build in the first place).
I wouldn’t even know where to start with fire risk zones…
For fire risk the premiums should be sufficient to allow insurance companies to do the mitigation work like vegetation clearing and controlled burns. Or pay into a fund that has state wildlands fire departments like cal fire do the work since they're also the ones that fight the fires. It can also turn into a employment boom for young able bodied folks.
Oh look, the hard unavoidable consequences of "it's just a few degrees"
If my house was destroyed due to climate disaster and all my livelihood and possessions were gone, and the insurance I was paying had the audacity to tell me they removed my insurance I would luigi their entire board of executives.
And wouldn't stop there....
“They may cuss us out,” Mr. Taylor said. “But they never stop building.”
One of the problem is new properties should not be allowed to be built in such areas. Others should be kind of grand-fathered, but I understand if insurers are being bankrupted, there is a problem somewhere.
That’s alright. Megacorp(tm), who incidentally also owns an insurance company, will buy it and gladly rent it to you.
Insurance is a scam. Fuck them. I pay each fucking paycheck and they don't want to pay. What if everyone dropped their insurance and then paid out of pocket. As long as you are paying something, they can not collect, and hospitals can't turn you away.
This is literally what America is fine with health insurance CEOs being denied further life coverage.
Edit: The article is about health insurance, but it doesn't matter. The goal of insurance is to take your money, use your money to invest, and then try not to pay you anything. Yes, people have had insurance cover some things in an emergency, but they should be doing more.
You probably can't pay out of pocket to replace your house if it burns down.
This article is about homeowners insurance, not health insurance
ALL insurance is a scam. They are ALL the same. Insurance companies do nothing but pay less than what has been given. That's how they make money.
Sure, in aggregate, across all homeowners, they pay out less then they take in. But that doesn't make it a scam. They can pay out more for a specific homeowner than they take in.
On average, you will be worse off if you buy insurance than if you don't. The odds are against the buyer with insurance.
However, if you have a utility function that isn't linear in the amount of money you have, it can be advantageous to get insurance. Say you don't care that much about having the small amount of extra money you'd have if you avoided insurance, but you care very, very much about losing the value of your house at one go. Insurance will mitigate that risk.
If you have enough reasonably-liquid assets that you can afford to just replace your house with cash, you might want to not get insurance. But even in that case, you'd need to hold assets in a liquid form, which places constraints on those assets. Let's say that the average number of houses that burns down in a state per year is 100. You could have every homeowner ensure that they have enough liquid assets to replace their house. But it'd be cheaper to have an insurer hold, say, 500 times the cost of a house in liquid assets. They couldn't cover the situation where all the houses burn down, and this is why insurers typically don't offer coverage for correlated risk scenarios, where all houses might be impacted, as in war. But for things like fires, it'd be extraordinarily unlikely for more than five times the normal amount to burn down, so having an insurer involved relaxes constraints on how assets are held and how much need to be held.
NPR Planet Money did a bit on correlated risk in homeowner's insurance a while back.
Exactly. Insurance handles low-probability high-impact uncorrelated disasters really nicely, and is worth paying for to protect against those.
Correlated disasters require public policy and shared infrastructure to lower their risk and the extent to which people are exposed to them.
Meh, most insurance does what it says on the tin, just read your policies carefully before you sign. Car insurance has absolutely saved my financial ass twice and life insurance has protected numerous families financially after the death of a loved one
Health insurance is a bunch of bullshit though because it shouldn't exist at all and the words Healthcare industry should have never been brought together.
That's what I mean. We pay so much in taxes that everything should be taken care of for us. We have been deceived into thinking that we can't possibly pay for all of this. Money is nothing to the US government.
Don't know why they think their anecdotal experience means homeowners insurance isn't a scam. Ask those homeowners in Staten island after hurricane sandy how great their insurance was
Well, insurance itself isn’t a scam. There are just a lot of shitty insurance companies who have found a way to profit by not actually following through. Conceptually, it makes sense. But it shouldn’t be a profit driven business.
Conceptually, it makes sense. But it shouldn’t be a profit driven business.
You're not required to use a profit driven insurance company (for things like home, life). You can choose to use Mutual Insurance company.
What are mutual insurance companies?
"An insurance company owned by its policyholders is a mutual insurance company. A mutual insurance company provides insurance coverage to its members and policyholders at or near cost. Any profits from premiums and investments are distributed to its members via dividends or a reduction in premiums."
Some of the big name companies are mutual insurance companies.
Comparing "routine" claims, like your house burning down to random chance, to a disaster zone affecting hundreds of homes all at the same time is comparing apples to oranges.
Realistically, it should be the government taking care of claims in this situation for freak disasters and covering for people to relocate if the area is deteriorating and expected to have more and more disasters due to things like climate change.
Might be true but if it was collectivized and not for profit, perhaps home ownership insurance would be worthwhile. It might have also exerted some regulation over the cancerous development of the suburbs, especially in places where growth and development was known to be a systemic problem decades ago. Like Florida, Arizona, Nevada, etc.
Ultimately, insurance is a bucket of money we all pay into to help the few who go through an emergency
Obviously you need administration to handle the bureaucracy and make sure no one is stealing from the emergency pot fraudulently
That being said, what I take exception to is the profit. Why, the ever loving fuck, is it ok to take more than your costs for this? Why is money intended for the public good funneled up to the ownership class?
Pay your people, pay out the coverage. The rest of the money has no business leaving the pot... Not to run ads, or to lobby lawmakers. Definitely not to end up in an unrelated person's pocket.
It's a case for a government run entity if I've ever seen one
Guy in the article, Richard D. Zimmel, has a 725K property, add maybe 300K of what's inside and you reach a million $. Not everyone has that in his pocket account :-/
And there's another part of the problem: artificially inflated house and property prices.
https://www.zillow.com/homes/for_sale/Silver-City,-NM_rb/
There are a lot of houses in Silver City, New Mexico that are a lot cheaper than the one owned by the guy in the article. My guess is that his is probably pretty ritzy for the area.