Americans Are Bailing on Their Home Insurance
Some homeowners who are skipping coverage say they can no longer afford rising premiumsHomeowners are increasingly forgoing home insurance, gambling that the likelihood of a disaster isnt high enough to justify the cost of a policy.
Some skipping insurance say they are doing so because they can no longer afford the rising premiums. The national average for home insurance based on $250,000 in dwelling coverage increased this year to $1,428 annually, up 20% from 2022, according to Bankrate.
Others, particularly among the wealthy, say they have enough money saved to rebuild or move elsewhere should their home be destroyed.
The risks of forgoing a policy are significant. When you dont have insurance and your home is destroyed by fire, you dont just lose your house and its contents. You might also have to pay for removing your homes remains as well as the costs to rebuild it.
https://www.wsj.com/personal-finance/americans-are-bailing-on-their-home-insurance-e3395515?st=vtii899tcac0e9q&reflink=desktopwebshare_permalink
underpants
(182,877 posts)I am looking into changing our home warranty if anyone has suggestions.
sinkingfeeling
(51,473 posts)PSPS
(13,614 posts)RainCaster
(10,914 posts)Learn how to do home repairs by building them. Get a good collection of the right tools along the way. Then drop that worthless warranty.
PSPS
(13,614 posts)Hestia
(3,818 posts)my mortgage payment and got my own. Now, the way I understand the law, insurance and taxes must go into an escrow account until paid off. Are these people who have paid off their mortgages? I would be too scare not to have insurance - insurance is there for in case situations...
Farmer-Rick
(10,207 posts)Jumped to $1,500 a year but that includes, a lot of acreage, liability for sale of all farm products, farm equipment and covers farm workers' injuries.
It's a double whammy because my property taxes went up significantly too.
sinkingfeeling
(51,473 posts)nasty threat from the bank because they thought I had dropped my insurance when, in fact, I'd just changed policies with another carrier.
TexasTowelie
(112,417 posts)Alternatively, the mortgage holder can obtain a force-placed insurance policy which is more expensive and with limited coverage. The cost of that policy is added is added to the mortgage. On some policies the homeowner may not receive any reimbursement from the insurance company if an event occurs since the policy is for the benefit of the mortgage holder rather than the owner.
dutch777
(3,035 posts)It is possible any bank chosen policy will simply cover the bank's liability. So say for instance if you have $100k in equity and still owe the bank $200k, the policy may only cover the $200k and no contents and no extended liability for say someone is injured on the property and the bank gets first dibs if fire or other takes out the house. If it save you enough money maybe that is a risk you want to take, but know you are at risk.
TexasTowelie
(112,417 posts)Decades ago after my friend and I graduated from college he cancelled the auto insurance on his vehicle because he was struggling financially. After he paid off the loan for his car the bank notified him that he owed another $1,700 for single-interest insurance with a demand that it be paid within 5 days or his car would be repossessed.
This leads me to wonder whether the bank is adding the cost of the insurance policy to the mortgage or if a demand will be revealed to the owner after they believe the mortgage is paid? Of course, the homeowner becomes subject to that demand immediately if they default. However, I could see a bank willing to not evict a homeowner if the real estate market is in a downturn or the property would require significant repairs to be listed for sale, then making that demand when the homeowner believes that they were able to pull off a fast one and pay off the mortgage.
I'm glad that I learned about insurance when I was a young man (working at the Department of Insurance was an education). It also makes me wonder what they are teaching to people who have MBAs. There was one lady with a MBA in Marketing that didn't know how to design a survey form and every response would require a short paragraph so that compiling and analyzing the information would be a challenge. Another MBA holder was starting up a branch of a major retailer and his focus was entirely on collecting revenue with no thought or care about what liabilities were present and needed to be addressed.
Business education should be a high school requirement. Whether it is a dedicated class or possibly part of a civics course, it would be useful for people to have this knowledge.
RussBLib
(9,035 posts)....so many billions, and so many people that cannot afford insurance, if they can even find an insurer. Any billionaire could put up some of their vast wealth to form an insurance company designed to pay out more than they collect in premiums, in exchange for a tasty tax write-off of some kind.
Imagine...a billionaire helping tens of thousands of people...hahahahahahaha! Yeah, I know.
As Beau says...it's just a thought.
https://russblib.blogspot.com
Igel
(35,356 posts)But a lot of prices are increasing because risks and payouts are increasing.
In some states, from FL to CA, insurers are pulling out because between increased risks and payouts and state regulators not approving rate requests they predict they will be required by the states to take a loss--and if you had to choose between pretty much guaranteed loss on a market or zero ROI when you can get a positive ROI in other markets (in other words, taking a loss) and pulling out, you'd probably also choose pulling out. This will put pressure on the state insurance companies and then the state will either have to pay out and assume the risks, let the housing market suffer greatly, or let higher rates get implemented.