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Thread: The insurance companies will force everyone to deal with climate change

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    Senior Member jp1's Avatar
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    The insurance companies will force everyone to deal with climate change

    A friend of ours recently sold a small condo he owned in Sausalito, a couple miles north of the Golden Gate Bridge. He'd owned it for 20ish years but hadn't lived there in over a decade. He made the decision to sell because of two reasons. His long term tenant was moving out, and the HOA could no longer find property insurance due to perceived fire risk.

    Fire risk is a big deal in Marin County. We have other friends who pay upwards of $5,000/year for their homeowners' policies on single family homes because of this and every year it's tougher for them to find insurance companies that will offer terms at all. Unlike our single family home friends who totally live surrounded by lots of wilderness and have a huge fire risk, our friend's condo isn't in what would seem to be a high risk zone. It's on the urban (at least as urban as the county gets) east side of an 8 lane highway and downhill from the large wilderness area on the west side of the highway. But apparently insurance carriers are worried that we'll have a freak event where the wind will be strong enough to push a fire down the hill and across the highway. And in the opposite direction of winds during typical hot weather here.

    Our friend is lucky to have sold his place for a price he was happy with. I assume it was a cash buyer since no bank would loan money for property that isn't insurable. The rest of the unit owners in the development must be freaking out because their mortgages all undoubtedly require that the HOA purchase property insurance to cover the buildings. This is the first I've heard of a situation like this. If it spreads to more of the developments near large wilderness areas it will quickly become a major financial crisis for much of the western half of the country as property values plummet due to uninsurability.

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    Senior Member Tradd's Avatar
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    I read FL has issues with insurance as well. I know people who would love to move to FL for the diving, but getting insurance is so difficult near the coasts and so expensive that they’ve decided not to move.

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    Senior Member jp1's Avatar
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    The national flood insurance program distorts things. Half of Houston, and plenty of other places, wouldnít still exist as viable places to live if the NFIP didnít subsidize them. It will be interesting to see how places that face other catastrophic risk deal with those risks. Will we come up with a national wildfire insurance program? Or a national hurricane wind program? I have no idea.

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    Senior Member Tradd's Avatar
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    Quote Originally Posted by jp1 View Post
    The national flood insurance program distorts things. Half of Houston, and plenty of other places, wouldn’t still exist as viable places to live if the NFIP didn’t subsidize them. It will be interesting to see how places that face other catastrophic risk deal with those risks. Will we come up with a national wildfire insurance program? Or a national hurricane wind program? I have no idea.
    It’s not just the flood insurance. A lot of people apparently can’t get regular homeowners insurance and have to get it under a state program.

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    Senior Member jp1's Avatar
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    Quote Originally Posted by Tradd View Post
    It’s not just the flood insurance. A lot of people apparently can’t get regular homeowners insurance and have to get it under a state program.
    That was exactly my point. Flood insurance is subsidized by the federal government. Nothing else is. Anyone who lives in a fire zone or a wind zone is gong struggle to get the insurance they have to have.

    Some state tweaks have been implemented but for the most part if the feds donít create a similar national welfare program like NFIP does for flood, a lot of property will become worthless due to wind and fire.

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    Our insurance in SC doubled when FEMA redrew the flood maps for the island.

    It is very difficult to get insurance there unless your house is built up (think on stilts.)

    Insurability was becoming a huge issue when we left. Good for your friend for selling when he did.

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    Senior Member flowerseverywhere's Avatar
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    Quote Originally Posted by Tradd View Post
    I read FL has issues with insurance as well. I know people who would love to move to FL for the diving, but getting insurance is so difficult near the coasts and so expensive that they’ve decided not to move.
    yes here in Florida living near the coast is extremely expensive due to insurance. All over the state roofs are particularly at risk. DeSantis recently signed a law and enticed insurance companies with subsidies. Many are pulling out. Another factor is house prices.
    honestly I was flabbergasted when immediately rebuilding was the focus of Sanibel/ Fort Myers. However the new building codes get stricter but cat 4 and 5’s cause tremendous destruction. Plus as the hurricane ripped across the state flooding and damage occurred in Orlando, Tampa and north of Daytona leaving a path of flooding and damage across the state. The St John’s river flooded many homes as it rose to record levels.
    I would say in my area only 25% of us have flood insurance and I know many who go bare. But like health insurance it seems like a lot of money for premiums until you need it.

    by the way, Miami and the Keys already have areas under water. Does not bode well.

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    Small, mobile housing is looking better and better! LOL.
    To give pleasure to a single heart by a single act is better than a thousand heads bowing in prayer." Mahatma Gandhi
    Be nice whenever possible. It's always possible. HH Dalai Lama
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    I remember seeing something on Florida and insurance and roofing, causing a bunch of carriers to leave the state.
    That doesn't even figure into the whole hurricane expenses, which are going to be spread nationally.

    Locally, all the insurance (homeowners, business, liability, etc) have gone up 40%.

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    Insurance companies in FL were refusing to insure roofs over 15 years old and a new law was passed. Now they are either changing policies supposedly to get around it or dropping coverage. Here is better info: https://www.abcactionnews.com/news/p...ng-older-homes

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