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Insurance companies refusing N.E. US homeowners

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  1. Mar 23, 2006 #1

    Ivan Seeking

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    http://www.post-gazette.com/pg/06082/675468.stm

    It strikes me that we might see a great deal of wealth simply evaporate. If in areas once prized for their millions+ dollar homes, the land is suddenly considered too risky to insure, then the wealth simply disappears? This seems potentially significant since many coastal areas are painted with expensive homes and land.

    I have often wondered how long the homes along the Pacific Coast Highway, around Malibu, California, will stand. Sooner or later these tremendously expensive homes seem destined to wash out, burn out, or slide in the mud.
     
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  3. Mar 23, 2006 #2
    Its even worse in Florida. Insurance companies are quick to leave the state, and raising their rates to crazy-high European levels, some as high as 15%. This is especially true after the 2004 hurricane season.

    I don't think that the multimillion dollar homes in the Northeast will be nearly as affected as the constant onslaught coastal homes on the Eastern Seaboard and Gulf of Mexico will recieve, particularly after Katrina. Storms usually dissipate when they get too far north.
     
  4. Mar 23, 2006 #3

    Moonbear

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    Inability to insure those homes seems like it might lead to a dramatic decrease in property values. I don't really know for certain on that, since I've never really heard of it happening before, but it just seems it would be something a potential buyer would have to think long and hard about if they couldn't afford to self-insure. If you can't get insurance, you also can't get a mortgage, as mortgage companies require homeowner's insurance. So, that reduces the potential buyers as well...how many people could afford to walk in and buy those homes for cash without a mortgage?

    One thing that crosses my mind, given these locations...do you really think it's weather-related, or that the homes are becoming so over-priced that the insurance companies just can't afford to replace them for any reason?
     
  5. Mar 24, 2006 #4

    russ_watters

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    I'm surprised that you care about the plight of the super-rich, Ivan. IMO, if you build a house on a beach - any beach - you take your chances. Homeowner's insurance isn't a right, it's a business transaction.
     
  6. Mar 24, 2006 #5

    Pengwuino

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    I don't think he's saying it's a right, more of an irony that the prized possesions are no longer very prized.... or well, might not be prized in the future.
     
  7. Mar 24, 2006 #6

    Moonbear

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    While Nantucket and Martha's Vineyard mostly have a lot of rich folks living there, Cape Cod is not just populated with the rich. The super-rich can afford to self-insure; it's those who are not so rich who will be hurt most by this.
     
  8. Mar 24, 2006 #7

    Moonbear

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    My take on it is that he's predicting a shift in wealth if the very rich were to suddenly lose their homes without insurance, or were to get stuck being unable to sell them for what they're worth because nobody can insure them.
     
  9. Mar 24, 2006 #8
    You should care about the plight of any human being under hardship Russ. :rolleyes:
     
  10. Mar 24, 2006 #9

    Pengwuino

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    Yah but like you said, they're rich enough to self-insure. Plus if you only really get a $10,000,000 house if you're worth $100,000,000 so i don't see any dramatic or even noticable shift in wealth if anything happens. i've been censored!!!!
     
    Last edited: Mar 24, 2006
  11. Mar 24, 2006 #10

    russ_watters

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    How can the not-so-rich afford beach-front property? :confused:

    By far, the most in danger are those who are right on the beach - in most places, if you go even a couple of miles inland, you get away from the strom surge and there really isn't much chance of losing your home. The article isn't all that specific, but in areas such as Martha's Vinyard, property values are extrordinarily high. We're not talking about "working-class" people here unless they inherited the land.
     
    Last edited: Mar 24, 2006
  12. Mar 24, 2006 #11

    Moonbear

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    The question is, is it a hardship for the very wealthy? I don't know how extensive the area is that is not being insured, though. There are a lot of fishing villages along the coast there too, where the people are certainly not wealthy. For them, it would be a hardship to lose their home, which is quite different from losing your vacation home.
     
  13. Mar 24, 2006 #12

    russ_watters

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    I should? Why? :confused: :confused:
     
  14. Mar 24, 2006 #13

    Pengwuino

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    It's called moving. Do people even have any responsibilities anymore? Afraid your house isn't in a perfectly safe community and geographical location? move. I'm sure someone will take your beach front property off your hands. If the insurers refusing to insure you isn't a big enough sign, oh well.
     
  15. Mar 24, 2006 #14

    Moonbear

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    Until only a few years ago, my family owned waterfront property in Maine (I wouldn't exactly call it beachfront, as the coast is all rock there). The family had owned the property for generations, long before it was so coveted. If my great-aunt hadn't willed it away to a gold-digger, maybe we would have been wealthier to sell it at current market value, but short of selling it, we are not a rich family, and were not while that home was in the family.
     
  16. Mar 24, 2006 #15

    Moonbear

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    If your livelihood is fishing, how do you move away from the coast?
     
  17. Mar 24, 2006 #16

    Pengwuino

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    live with it.

    Don't like your job? quit. Life isn't supose to be a joyride. Some of the only good things about this world are the people like those who do make their livelihood off fishing full well knowing the risks but don't complain.
     
  18. Mar 24, 2006 #17
    It's called compassion for your fellow man.

    (Maybe we are not on the same page)
    I am talking about the loss of their home.

    If they can't get insurance, they knew about that risk when they purchased the home. That's a different story.

    (Now if we are talking about a historic house or a famous house by an important architect, then I do feel sorry and think we should try to save the house or move it)
     
    Last edited: Mar 24, 2006
  19. Mar 24, 2006 #18
    The people who spent generations as fishermen should all just sit back and shut up as they loose their livelyhoods and their homes? I would like to see you quit your job with rent and a family.
     
    Last edited by a moderator: Mar 24, 2006
  20. Mar 24, 2006 #19

    Moonbear

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    Nobody said they don't like their job. If they wanted to change jobs, moving from the coast would be easy, but if they want to keep their job, they need to stay near the coast. These people don't exactly live in mansions you know. And, if the current fishermen move away, someone else willing to take the job can't even afford to buy a home to do that if they can't get a mortgage...and you can't get a mortgage if you can't get homeowner's insurance.

    Russ, as for the issue of storm surges only affecting people right on the coast, that really isn't going to matter if someone a bit inland also has their insurance dropped because the insurance company decides they are "close enough," and a tree falls on their roof, does it? They aren't talking about flood insurance here, the article is talking about homeowner's insurance.
     
  21. Mar 24, 2006 #20

    Moonbear

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    I agree it's different if someone buys a home knowing they can't get insurance. It's different if someone who currently owns the home and does have insurance suddenly has that insurance dropped, especially if none of the buyers in their market range would take the risk of buying without insurance...in other words, they're stuck with a house they can't sell and can't insure. Moving is not an option if you can't sell your current home, or if you have to take a substantial loss on it that won't even pay off the mortgage because nobody is willing to pay what you paid for it when they can't get insurance.
     
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