Off-Topic: Southern California Fires
- Thread starter BigJCy
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The insurance companies’ role in this is more complicated in some states than others. Of course they expect to make some money as all for-profit businesses do. But in some cases it’s because state insurance regulators will not allow premiums to increase to an extent where the carriers can even hope to break even based on their risk modeling.
Like California and Florida, it’s only a matter of time until states take over and provide government-subsidized insurance because no for/profit enterprise can afford to do business there without charging premiums homeowners simply cannot afford.
Like California and Florida, it’s only a matter of time until states take over and provide government-subsidized insurance because no for/profit enterprise can afford to do business there without charging premiums homeowners simply cannot afford.
The states are going to have to step in if the insurance companies can't provide a market. Florida has their Citizens Property Insurance program, which is a state-run non-profit that's the insurer of last resort.
The alternative would be letting their real estate markets seize up. Only those paying all cash could buy, which means a whole lot of people wouldn't be able to sell. And that's if enough people are even willing to have significant assets tied up in properties that can't be insured.
They will, and/or they'll have to tear down some of their regulatory environment to allow different rates than they do now (which is still largely going to translate to "insureds are paying more" in those areas, but that's still better than not having access at all). It's a big problem that's going to/already does affect tons and tons of people. There needs to be solutions coming down the pipe, like, now...and even those are still going to leave some people very unhappy.
The winds will ease into tomorrow, but fires are 0% contained, any thoughts on how quick they can contain the 3 major fires?
I can confirm this is 100% true. The real estate and mortgage industry plays an equally important role in all of this that should be understood and not underestimated.
There is a show down brewing as we speak among insurers, mortgage lenders, and Fannie/Freddie. I’m on multiple committees/roundtables trying to address this.
Their policies around insurance drive most of the demand for policies as we know them. Many Americans would be willing to take lesser coverage (not necessarily a great idea) in the name of affordability and insurers do offer more affordable products. The problem is that if you have a mortgage you’re probably beholden to their guidelines which means that is the kind of HOI policy you’re forced to get.
Some homeowners get cute and try to reduce coverage after purchase. But then their servicer - also likely bound by same policies - can force place even more expensive insurance if (during their annual validation) find your coverage doest’t meet guidelines.
Fannie and Freddie don’t wish to hold this kind of insurance risk, but only riskier to them than that is a lack of liquidity in these markets leading to defaults, declining demand for housing, and declining home values as a result. They hold unthinkable market risk in these areas and cannot make it too difficult to keep the homeownership machine up and running. They need to “keep the spigot on”, so to speak.
I would have almost guaranteed a softening of their policies to accept more risk themselves (they can afford it) although with new administrations likely to privatize Fannie and Freddie again this gets very complicated.
Regardless, something has to give.
Depends, gotta get the air tankers up, probably take maybe week. This isn't a forest fire scenario you see further north in California. More like brush fire that has buildings in its path. Yes there are trees but it's not forests
If winds die down they will get in front of it fairly quickly.
It is. It’s a bad spiral.
Don’t even get me started on the fraud and abuse and baseless litigation in Florida that has lead to insurance companies exiting there.
Increased climate risk + increased cost of materials + increased cost of labor is a really bad cocktail.
While I don’t want to turn this into a cave topic there are a lot of politics at play (both sides of the aisle) here that contribute to the problem and the seemingly inescapable cycle we’re in.
What to do when 5-10k have no home in an area that has nearly 0 excess capacity. I hear many are living in tents in Asheville still.
insurance guy not allowed in basement.
This is another aspect not discussed enough. We’re already probably millions of housing units short of where we should be nationally. These events do not help.
How are all our SoCal Clones? Everyone staying safe?
4th toughest, it’s incredible trying to place people right now. Don’t have any proof of your roof age? Good luck
My daughter is fine but she's right in the city.
Good for the time being. We’re about halfway between the two big fires, so no imminent threat in our immediate area.
Fine where I am at but several friends lost their homes.
So going to let some friends move into our house while they sort their lives out.
Just blocks of homes being burnt down
So going to let some friends move into our house while they sort their lives out.
Just blocks of homes being burnt down
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