Agreed. Went back and re-read this. This does seem to be a really, really badly written piece. I personally loathe the folksy"let me explain this to you" style when discussing finances.
When we finance we choose fixed-interest ten-year loans. Taxes and insurance premiums are variables and separate. As you note, in the cited 3000 dollar ex…
Agreed. Went back and re-read this. This does seem to be a really, really badly written piece. I personally loathe the folksy"let me explain this to you" style when discussing finances.
When we finance we choose fixed-interest ten-year loans. Taxes and insurance premiums are variables and separate. As you note, in the cited 3000 dollar example above, all three costs are bundled together as variable costs to arrive incorrectly at the 300 dollar monthly increase, when in fact only two of the three costs are subject to change. As well, as commenters are pointing out, variable costs vary state to state.
The long-term practice that works best for us over decades has been to maintain zero-percent monthly credit card debt and maintain the best possible credit rating - no missed or late payments on any loan ever.
Might be worth taking down the article, as others have suggested, until all the math has been checked. Most people I know get impatient quickly when folks don't get these kinds of numbers right. Eric might have an argument to make here, he needs to do so clearly.
Doesn't it depend on the insurance rate vs loan payment? I bought a waterfront home in Florida in 1999. My mortgage payment was about $800/mo, and my ins premium upon purchase was about $350/mo. When I sold the house in 2003, the premium was about $700/mo. Rates then continued to go up. I saw a few rates for homes like mine in my old neighborhood around 2012, and they ranged from $1,000/mo to $1,250/mo. So, had I still owned the home, my insurance premium would've been substantially higher than my loan payment.
I have no idea what rates are today, but it's my opinion that the days of average Americans owning waterfront homes are over. Waterfront home prices have risen a lot, but that's not the killer. It's the insurance premiums that'll get you.
Wow! Yeah, if I was going to guess the range for my old house, it would be in the $20k/yr range. It's really quite crazy when you think about it, because in a mere 10 years, one could stash, say, $200K into safe investments that could easily yield enough (in a catastrophic loss) to provide a substantial start - and it's in your account, you're not dependent on the good will of an ins company. And that's all in 10 years, by 20 years, you'd be set.
I guess what I'm saying is, that insurance companies should be a service towards financial freedom, which shouldn't be cheap, but should be affordable. But instead, they're a method of economic enslavement.
Well, yes and no. There's the issue of what "over valued" means. I sold my house in 2003 for a $100k profit. The purchaser decided to sell in 2007 for what would've been a $200k gross profit to me. However, he was unable to sell before the crash. He eventually sold the house around 2014 for what would've been a $175k gross profit for me. He made about $75k gross profit. However, it was quite expensive living.
The issue gets down to this: what are the insurance company's goals It's my opinion, that their goals are to take American citizens for whatever they will stupidly give them, and then tell them, "Oh Shit! This disaster is WAY to big for us to handle! We're bankrupt! Sorry, but there's only pennies on the your dollar of insurance. We're so sorry!"
You are ridiculously ignorant about insurance. The goal for the insurance company is to make a profit just like any other business. What property insurance company went bankrupt after some disaster that ? I know them all so enlighten me.
It is every company's goal to take whatever their customers are willing to pay them. But it's a competitive industry. Also, do you see the contradiction in believing P&C insurers are somehow grossly over-charging you and somehow also regularly going bankrupt? It is a contradiction, I assure you. The reality is that neither of those things are true. In the U.S., there have been very, very few P&C insurer bankruptcies in the last 20 years, but statutory combined ratios on homeowner's insurance lines typically run around 100% (with insurers living on the float). You may find the following useful. It's always helpful for angry consumers to also see things from the side of the producer.
Firstly, No. Their not "regularly going bankrupt". They establish subsidiary entities to absorb the shock of a regional distaster. Then those "subsidiary entities" go bankrupt in a regional distaster forcing policy holders into endless red-tape to even get anything at all, so they often settle for next to nothing.
I can show you stats from hurricanes in Florida, pal. You want to see them?
Florida is an insurance nightmare. Know why? Because you're in the path of every fucking hurricane. If you want to live in the tropics then you should pay the proper premium for the insurance companies risk. If you don't like it pick your ass up and move.
You haven't provided any stats, from the State of Florida Insurance Commissioner or otherwise. I have provided you the list of Florida insurers in receivership and here you can download the total resi property policies in force in Florida by company: https://floir.com/tools-and-data/residential-market-share-reports
I think it would also be fair to point out that not all of the price increase is due to previous disaster payouts. Inflation accounts for a large portion of the price increases. A dollar just don't buy what it used to.
The days of the federal government subsidizing insurance for people in flood plains are over. Building should never been allowed there - see “Superstorm Sandy “.Same with building in fire prone areas without proper control of the undergrowth - see Pacific Palisades.
The math might be off, but the homeowners insurance problems are very real. Here in New York a long history of courts favoring plaintiffs in bogus slip and fall lawsuits, and favoring fake and inflated storm and water damage claims against insurers, has led to cancellation of thousands of policies by insurers, including mine. Luckily my Mortgage was paid off so there were no immediate consequences - typically the lender would have "called" the entire principal balance of the note due within, say 60 days, then, if it isn't paid, commence a foreclosure proceeding. The long-term consequences of being un, or under-insured could be catastrophic, however.
The result of all this is going to be the addition of a chaotic wrinkle to the housing market, which will create a ripple effect across the entire economy.
One path to sanity would be to elect and/or appoint more conservative judges who are willing to follow the law rather than the money from campaign contribtions by personal injury law firms, or some vague social justice agenda. Unfortunately this is something that can only happen with the consent of party gatekeepers, which doesn't seem likely in the near future.
Agreed. Went back and re-read this. This does seem to be a really, really badly written piece. I personally loathe the folksy"let me explain this to you" style when discussing finances.
When we finance we choose fixed-interest ten-year loans. Taxes and insurance premiums are variables and separate. As you note, in the cited 3000 dollar example above, all three costs are bundled together as variable costs to arrive incorrectly at the 300 dollar monthly increase, when in fact only two of the three costs are subject to change. As well, as commenters are pointing out, variable costs vary state to state.
The long-term practice that works best for us over decades has been to maintain zero-percent monthly credit card debt and maintain the best possible credit rating - no missed or late payments on any loan ever.
Might be worth taking down the article, as others have suggested, until all the math has been checked. Most people I know get impatient quickly when folks don't get these kinds of numbers right. Eric might have an argument to make here, he needs to do so clearly.
Doesn't it depend on the insurance rate vs loan payment? I bought a waterfront home in Florida in 1999. My mortgage payment was about $800/mo, and my ins premium upon purchase was about $350/mo. When I sold the house in 2003, the premium was about $700/mo. Rates then continued to go up. I saw a few rates for homes like mine in my old neighborhood around 2012, and they ranged from $1,000/mo to $1,250/mo. So, had I still owned the home, my insurance premium would've been substantially higher than my loan payment.
I have no idea what rates are today, but it's my opinion that the days of average Americans owning waterfront homes are over. Waterfront home prices have risen a lot, but that's not the killer. It's the insurance premiums that'll get you.
In my town of Santa Cruz, CA, new policies are ranging from $13K-30K a year.
Wow! Yeah, if I was going to guess the range for my old house, it would be in the $20k/yr range. It's really quite crazy when you think about it, because in a mere 10 years, one could stash, say, $200K into safe investments that could easily yield enough (in a catastrophic loss) to provide a substantial start - and it's in your account, you're not dependent on the good will of an ins company. And that's all in 10 years, by 20 years, you'd be set.
If.....you didn't have a mortgage that is your choice. If you have a mortgage then the bank will not be willing to accept such a risk.
I guess what I'm saying is, that insurance companies should be a service towards financial freedom, which shouldn't be cheap, but should be affordable. But instead, they're a method of economic enslavement.
I think the prices are saying these homes are, by orders of magnitude, over priced and over valued.
Well, yes and no. There's the issue of what "over valued" means. I sold my house in 2003 for a $100k profit. The purchaser decided to sell in 2007 for what would've been a $200k gross profit to me. However, he was unable to sell before the crash. He eventually sold the house around 2014 for what would've been a $175k gross profit for me. He made about $75k gross profit. However, it was quite expensive living.
The issue gets down to this: what are the insurance company's goals It's my opinion, that their goals are to take American citizens for whatever they will stupidly give them, and then tell them, "Oh Shit! This disaster is WAY to big for us to handle! We're bankrupt! Sorry, but there's only pennies on the your dollar of insurance. We're so sorry!"
It's a big fat con.
You are ridiculously ignorant about insurance. The goal for the insurance company is to make a profit just like any other business. What property insurance company went bankrupt after some disaster that ? I know them all so enlighten me.
It is every company's goal to take whatever their customers are willing to pay them. But it's a competitive industry. Also, do you see the contradiction in believing P&C insurers are somehow grossly over-charging you and somehow also regularly going bankrupt? It is a contradiction, I assure you. The reality is that neither of those things are true. In the U.S., there have been very, very few P&C insurer bankruptcies in the last 20 years, but statutory combined ratios on homeowner's insurance lines typically run around 100% (with insurers living on the float). You may find the following useful. It's always helpful for angry consumers to also see things from the side of the producer.
https://www.spglobal.com/market-intelligence/en/news-insights/articles/2024/5/us-homeowners-insurers-net-combined-ratio-surges-past-110-81711947
Firstly, No. Their not "regularly going bankrupt". They establish subsidiary entities to absorb the shock of a regional distaster. Then those "subsidiary entities" go bankrupt in a regional distaster forcing policy holders into endless red-tape to even get anything at all, so they often settle for next to nothing.
I can show you stats from hurricanes in Florida, pal. You want to see them?
Florida is an insurance nightmare. Know why? Because you're in the path of every fucking hurricane. If you want to live in the tropics then you should pay the proper premium for the insurance companies risk. If you don't like it pick your ass up and move.
I don't need you to. I know the answer: by total net premium written, not many:
https://www.myfloridacfo.com/division/receiver/companies
I don't know what you're showing, but my stats come from the State of Florida Insurance Commissioner.
Actually, it's pretty wide open. You can go and see for yourself.
You haven't provided any stats, from the State of Florida Insurance Commissioner or otherwise. I have provided you the list of Florida insurers in receivership and here you can download the total resi property policies in force in Florida by company: https://floir.com/tools-and-data/residential-market-share-reports
I think it would also be fair to point out that not all of the price increase is due to previous disaster payouts. Inflation accounts for a large portion of the price increases. A dollar just don't buy what it used to.
The days of the federal government subsidizing insurance for people in flood plains are over. Building should never been allowed there - see “Superstorm Sandy “.Same with building in fire prone areas without proper control of the undergrowth - see Pacific Palisades.
The math might be off, but the homeowners insurance problems are very real. Here in New York a long history of courts favoring plaintiffs in bogus slip and fall lawsuits, and favoring fake and inflated storm and water damage claims against insurers, has led to cancellation of thousands of policies by insurers, including mine. Luckily my Mortgage was paid off so there were no immediate consequences - typically the lender would have "called" the entire principal balance of the note due within, say 60 days, then, if it isn't paid, commence a foreclosure proceeding. The long-term consequences of being un, or under-insured could be catastrophic, however.
The result of all this is going to be the addition of a chaotic wrinkle to the housing market, which will create a ripple effect across the entire economy.
One path to sanity would be to elect and/or appoint more conservative judges who are willing to follow the law rather than the money from campaign contribtions by personal injury law firms, or some vague social justice agenda. Unfortunately this is something that can only happen with the consent of party gatekeepers, which doesn't seem likely in the near future.