The Possible Collapse of the U.S. Home Insurance System
Вставка
- Опубліковано 9 чер 2024
- Across the United States, more frequent extreme weather is starting to cause the home insurance market to buckle, even for those who have paid their premiums dutifully year after year.
Christopher Flavelle, a climate reporter, discusses a Times investigation into one of the most consequential effects of the changes.
Guest: Christopher Flavelle (www.nytimes.com/by/christophe...) , a climate change reporter for The New York Times.
Background reading:
• As American insurers bleed cash from climate shocks (www.nytimes.com/interactive/2...) , homeowners lose.
• See how the home insurance crunch affects the market in each state (www.nytimes.com/interactive/2...) .
• Here are four takeaways (www.nytimes.com/2024/05/14/cl...) from The Times’s investigation.
For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.
My insurance company offered $3,000 for $36,000 damages after I paid 15 years of premiums. Do not bail them out.
There is a court system.
@@kreek22Having to sue the insurance company is also a problem with an uncertain outcome? Insurances should be government managed non profit system, like Medicare.
@@DiO-fy5ex If it's government managed, it will be mismanaged. It will also be communist. Move to Cuba.
it only gets worse
Goggle insurance corruption index by country. Human caused climate change is intensifying the storms, hesy waves and droughts.
Nearly 20 years ago my partner and I wrote a list of signs of climate change and economic stress that would indicated we needed to take certain actions to protect our future.
Insurance companies withdrawing from markets due to excessive losses from fire and weather events was high on that list.
And here we are - have been for a while. Nice to see the media finally waking up to reality.
It's more due to fraud here in Florida than anything else. I work in the industry and see fraudulent claims daily.
Curious what the other ‘signs’ were!
this is actually a lie. The insurance industry is pulling back because they are not making as much money as they would like. It has nothing to do with climate change.
@@carolynbrzezinski5779 Multi-generational households (economic stress).
Dangerous wet bulb temperatures (already happening)
Food price increases (that signal is muddied by covid and corporate price gouging)
Coral bleaching
Fuel prices
International conflict
Trade protectionism
The point was to avoid being blindsided by a failing environment and economy and maintain a reasonably comfortable lifestyle as long as possible.
All of today's issues are at least 20yrs old
The most frustrating thing is you pay in for 20 years never file a claim. You have a legitimate covered claim and you damn near have to sue them to pay what you are owed.
That’s what WILL collapse the residential insurance market: word spreading that they won’t cover your losses -even after 20 yrs of faithfully paying premiums. People will simply stop paying on something that isn’t worth it.
the policies are written by lawyers.. so that lawyers have to decode them.. so lawyers make all the money from them.. it's a cycle they have created to keep the money. I worked in insurance.. it's a scam.
After the big fires a few years ago here in Australia, the experience across the affected areas was that listed corporations will find or invent any excuse they can to avoid paying out. The only insurers that pay out reliably are the mutuals, because their only shareholders are their policyholders.
Start your own investment portfolio that is specific to your home's coverage. Subcategories can include: HVAC, water heater, washing machine, dryer, replacement, water heater, window(s), exterior door(s), minor/major flooding, etc. Look at the manufacturing dates and start a sub acct. for that item. Go forward with other sub accts. A little at a time. Stop 'financing Chinese university students' and start financing yourselves.
Third world countries are notorious for fraud. Hurricane Andrew, which hit America's most famous third world city was the harbinger of these fraud problems. The fraud was more shocking to the (mostly Wasp run) insurance companies than even the massive destruction.
The Home Insurance System is being propped up to prevent collapse. A collapse would mean that more serious attention would be given to climate change, which is exactly what corporate America doesn't want to happen. Its main effort right now is to preserve a "narrative of stability" - that climate change is a gently linear problem, which we have time to address. Critical "sudden collapses" are not compatible with their profitable "business-as-usual" narrative.
Corporate America isn’t giving money to insurance companies to hide the effects of climate, ffs. This is on par with the moon landing being fake.
He’s correct about how mundane the effects of climate change are. Like frogs boiling in pots
I did my bachelor’s thesis at the Climate Change Institute in Orono, Maine back in the 90’s. I also just quit my job as a licensed personal lines agent. It’s clear to me that insurance is failing, bigly and badly.
Nothing to do w a climate change .. hail hits open space area year after year .. a subdivision gets built there . The climate damage is getting higher every year. 🤔odd ya last year no damage hail Is getting worse every year. You don't say. I grew up here and nvr saw hail like that. You lived here yep. In the horse pasture? Just stop
So dumb. Homes in wood burn down . Home on clif fall down ..
How is climate change not inflationary for nearly everything? In other words, a destabilizing climate is either extremely profitable for the people who are most responsible for causing it, the wealthy and asset owners. Or, it ends the stable conditions that make free markets possible. Leading to a slow and consistent decline and collapse, in the absence of massive intervention and redistribution. Either way, climate change doesn’t bode well for the economy as people expect it to function. Insurance is just the tip of the proverbial iceberg.
That would only matter if the corporations driving the economy cared about anything beyond their next quarterly financial statements. But I’ve got some bad news for you
How is climate change profitable for the wealthy and asset owners when it destroys assets (real estate for example) and investments (as the cost of mitigation, which doesn’t produce anything, soars). The ability of people to misread anything in terms of their ideology boggles my mind. The rich will be hit far harder than the poor. We will all become poor, then most will die. The ones who survive are those who have subsistence skills
@@juliahello6673🫤How did the rich get richer with the lock down?
The ocean is not rising... from glacier melt flowing into ocean? Well we need fresh water so boom problem solved. No drought, no rise... supply the world so disease go down etc.
temp go up? Well where does everyone vacation? Yes the beach the heat so we must enjoy it. AZ is getting influx every year .. they have 3 months not unusual hit 120f... In Denver not far away we don't have a single night stays above 56... even middle summer temp Will drop to mid 50's. Avg July our hottest month is 84 and that's for 5 min.. we are avg temp North America.. MANY COLDER.. so we need to heat up 60 degree to be higher than desirable AZ. They say 3 c/7f we will die .. what a load of Crap.
They are just about ready to start the food shortage . It is 100% intentional. They burned all the chicken and just made the ranchers out here kill their cattle . The farmers in Norway protested last year when they took their land n killed cattle. Stop being foolish we need all of us ..
Well, yeah. 90% won’t survive….the same 90% that never benefitted from climate destruction. Isn’t capitalism great?
Inflation is not prices directly going up. Inflation is the money supply inflating which then causes more money to chase goods that in turn causes the price of goods that have a fixed supply to go up. Fiat monetary systems (where government can inflate the money supply by issuing unlimited bonds that banks use as collateral to create dollars--in other words deficit spending) eventually cause people to lose faith in the value of fiat money. Then there is deflation as debt defaults destroy money since 90% of money was created out of thin air by banks when debts are created. When debts can't be paid and debtors default, that debt which was an asset for the creditor and allowed the creditor to spend into the economy disappears. As it becomes more and more apparent to society that much of the debt underlying our monetary system will not be paid, society will turn to hard assets to try to preserve their wealth. People also turn to assets that work best as money because they are durable, scarce, easy to trade, etc. Traditionally that was gold, but because gold was so difficult to transport and prove pure, governments and banks centralized it and corrupted its usefulness as people's freedom money separate from government control. Approximately 15 years ago there came a technological invention that turned out to have perfect monetary properties: perfect mathematical scarcity, decentralized beyond the control of government, easy to transport. Yep, you guessed it...
I work for a large publicly traded insurer and bottom line the algorithms are now weeding out customers who’ve had a claim free past in certain zip codes are getting dropped on the theory that you’re likely to have one. It’s so frustrating and management is not interested in listening.
Why are people being allowed to continue building in disaster-prone areas? Or even significantly improve properties already there? Because the people who own or are buying those houses will try and find a way to spread(socialize) the insurance risk among the rest of us. Private wealth and equity supported by socialized cost and risk. The poorer of us once again helping finance the wealthy's lifestyle choices.
Good question!
You're absolutely right
Because people like you have no clue..
They want to privatize the profits when they sell the homes at exorbitant prices but socialize the costs when an inevitable hurricane hits Miami and does more than $1.3 trillion in damage.
Well part of the reason is that pretty much everywhere in the US is disaster-prone. Something like 1/3 of people live in wildfire zones for example (though the vast majority of them don't even realize it), add in floods, hurricanes, heat domes, earthquakes, and severe convective storms (tornadoes, large hail, damaging wind gusts), and you get most of the rest.
I watched this play out where I live. I personally live in the the intermix. There is a very high chance my house will be exposed to wildfire, so it's built to have a good chance to survive. Non-combustible materials, cleared fuel breaks, un-vented assemblies, tempered windows, etc. Our county has a certification system for fire safety, which keeps my insurance rates low as long as I maintain my property to these standards (in multiple fires, the certified homes have had an extremely high survival rate).
Below me in the wealthier suburbs people were supposed to be "safe". As such, they were not required to build or maintain properties in a fire safe manner because "it couldn't happen here". They were miles from the mountains, separated from wild areas by freeways, shopping centers, etc. You can see where this is going. I watched 1000 homes burn in an afternoon from my deck. In contrast to the certified homes in the intermix zone where I live, which mostly survive fires, the "safe" suburban homes were lost at a nearly 100% rate. The only survivors were a handful of structures that happened to be built (possibly unintentionally) with fire-safe materials.
This isn't even a unique story. It's happened repeatedly across the country from Tennessee to Hawaii.
Safe areas do not exist, and pretending they do is what sets up disasters over and over and over. We need to build structures to survive rather than fantasize that there's a safe area you can move to. Yes, there are some places where homes simply can't be practically built to survive common disasters (say below about 10ft of elevation on the Gulf or Atlantic coasts) but the vast majority of current losses could be practically prevented by hardening structures at reasonable cost.
Next look at the re-insurance industry. Talk to the insurance agents for the insurance companies. They know what’s going on. Ouch
the ending of this was perfectly summarized! CC isn’t going to be one big disaster that will shock us all awake, it will be several small disasters that lead to a quite collapse
Things that reduce your risk never pays off. You can do everything they suggest and they still raise your premium the very next year.
You got it👍👍
You have to change insurers to get the best rate. It’s best to change every third year. Insurance companies don’t care about how years you’ve been a customer.
@@rheuss1 I have attempted to do as you suggest for years. I live in California. I have a good driving record. I am 70 years old. I been with Allstate 40 years. I have 4 cars and a home insured. They bundle my rate. When I went to progressive, they were higher. When I went to Farmers, they were higher. When I went to state farm, they were twice as much. When i went to the general, they didn't write in California. I'm a veteran. I went to USAA. Twice the cost. So much for shopping around.
Home insurance is a rip-off. If homes are made by steel and concrete with metal roofs, they can be built to withstand hurricanes, and be impervious to fires, termites and other disasters. Homes need to be built better so homeowners can avoid needing expensive home insurance.
Concrete & Metal Roof Constructed Houses will offer NO protection from sinkholes, nor flooding.
And you can NOT get Flood Insurance, without first having Homeowners Insurance.
But Homeowners Insurance is indeed a HUGE rip-off !!!
Homeowners Insurance is EXTORTION !!!!
Homes can certainly be built to withstand higher forces, but it costs more money.
There was a home built on Mexico Beach in Florida that withstood a serious hurricane a few years ago. They designed it for 250 mph winds, and it worked. I think the cost per square foot was about double. Good investment if you have the money!
@@solarwind907 I agree. Babcock Ranch has homes in South Florida that survived the last hurricane with almost no damage, but they cost $400,000 to $1,200,000. A company called Deltec homes can also build hurricane proof homes but they cost $1,000,000. So, hurricane proof homes are too expensive for most people as you pointed out.
See CalEarth
Sbl, agree, homes need to be built, stronger and insurance companies exist to make money for insurance companies.
However, please google. Greensburg EF five tornado. It threw cars hundreds of yards. Tore off fire hydrants. If you watch a video of that storm, you will see plenty of Concrete in Steel thrown around.
Watching those videos makes me glad I have a basement. Good luck to you,
Insurance prices are tangential to this issue. Parts of the country that used to be economically habitable no longer are. The solutions I can think of are to change the weather, harden the homes, or move the people. Only one makes sense in the long term.
Greed is destroying all our nice things.
you mean climate change is and in the future will destroy your way of living in the future
Political greed, especially in the form of importing new voters for the communist party.
Greed isn’t causing the floods and tornadoes and hurricanes that are breaking insurance. Climate change is causing them.
You saying greed is what causes climate change?
Communists, like the American regime, do have a terrible environmental record. And apparatchiks are always greedy.
In NZ they offer national home insurance that is paid into by everyone so that those who suffer unforeseen disaster do not lose their homes. We would do well to ensure homeowners are protected from home loss.
agreed. all the billions we pay for insurance could go to a general pot and would be better used than to pay executives in the insurance industry.
Not on a replacement basis, though.
@@ppetal1 yes
@r8chlletters
Well rebuilding your million dollar home in the direct path of hurricanes after it's been destroyed a couple of times isn't an unforseen disaster. It's just plain ignorance. If these people choose to do so the masses shouldn't have to foot the bill for their bad choices.
@anniesshenanigans3815
The US government subsidizes junk mail to the tune of billions of tax dollars a year. They are not the ones we want in charge of more of our money. Don't confuse our government with New Zealand's
(That does not include the money they pay the post office to deliver it.)
“no one thought that this problem would affect so much of the US so quickly…” just after 5:45. For one, I did as an environmental scientist and engineer because it has been known for decades the ongoing climate change amplifies weather; be it hurricanes, tornadoes, flooding, drought, etc. When a tipping point of realization is passed in a monetary market, without built in dampeners to change (as in the stock market), the defecation can hit the ventilation.
This is NOT new in Colorado. FIRES. For 20+ years people are opting to rent apartments in lieu of spending a fortune on home insurance. Our forests are 60% DEAD and ripe to burn. It's getting worse as the drought gets deeper.
As you imply, I think, we set ourselves up by building unnecessarily large and opulent buildings without much consideration as to how they might be, again, unnecessarily, at risk.
I think its racist to say dead trees might cause fires
Well.in california it is to say that
The owner pays the insurance and includes it in the rent. You will still pay the insurance even if you rent.
@ThisIsToolman
Exactly imagine rebuilding your McMansion over and over again on someones dime and not expecting a drastic increase in your rates.
One obvious technical solution to at least mitigate damage: build smaller.
This also reduces causes of climate change.
It is also inevitable.
Hardening residential properties to withstand the perils of what is our “new normal” weather risks seems like the only way to go - saving and investing in more resilient roofing systems, etc is likely the easiest thing a homeowner can do
This is framed so bizarrely. This insurance crisis didn't "spread" to louisiana in the interim between Florida's crisis starting & today. We were having the same exact issues before Florida was thrust into the national spotlight. It's been snowballing ever since. I get that this is now coming up in states that aren't typically in the bullseye of Mother Nature's dart board of fury. But this wasn't just a Florida problem back then.
You know why beach houses used to be shacks? Because no one would insure them. Then they decided to spread the risk among the rest of us. America is all about private equity and wealth and shared cost and risk.
@@gregoryabbot420, 💯💯💯
@@gregoryabbot420 🤔 idk about where you live but down on the beach here that's what is mostly there, small houses on tall stilts. They're newer, & higher because what was there is now gone. These aren't even homes, per se, they're more like weekend spots. The homes closer to the beach but further inland are still higher & newer but nothing fancy. There isn't anything down there except a couple of new LNG plants, fishing & shrimping, & the muddy Gulf of Mexico. Florida is a different story all together from Louisiana when it comes to the coast, no one comes for our beaches - old man river doesn't keep them pristine. The closest "nice" beach to me is crystal beach near Galveston. It's still the same muddy Gulf, but the rich folk out of Houston (well, the suburbs) have had nice houses there because it's close by & Kemah & Galveston are good get aways.
Fascinating, and a definite canary in the coal mine moment.
At one point, homeowners were responsible for 100% of the risk of their homes. They budgeted and built their houses with that in mind. Insurance companies started and were paid to take on the majority of that risk on a year by year basis. Now, the risk is starting to be shifted back to the riskiest homeowners. We're basically moving back to the original risk distribution.
@toastedkiwi4358
Sounds good to me. If you can't afford to rebuild your McMansion in a hurricane path you couldn't afford it to begin with.
We live in a sunny area, but you can't get home insurance if you have solar panels on your roof. It's killing the solar industry.
That’s actually a good idea. I live in a sunny and windy area and the roofers are making a fortune fixing the damage caused by solar panels blowing loose.
@@lindapindabelinda3570
If you get your solar installed by a licensed, bonded and insured contractor , they won’t blow away in a storm.
Sounds like you need to hire a NABCEP certified professional.
By the way, installing solar in a sunny area, greatly lowers the quality of greenhouse gases, you are emitting into the atmosphere.
Since greenhouse gases are causing, catastrophic climate, change and more extreme weather, installing solar is part of the solution.
Properly installed photovoltaic systems are actually a good and intelligent way to spend your money.
I live in very sunny northern California, I have solar pv panels on my roof, and I still have home insurance. Where are you that your provider dropped you? Seems odd.
@@taobot8 Nevada
@@needmorecowbell6895 and they explicitly told you it was because of your solar panels?
Let's talk about insurance for commercial buildings. Either the landlord or tenant pays for the insurance, and in FL, neither can afford these huge increases. For example, an auto repair shop in Cocoa is closing because the insurance went from $4500/ year to $14,000 over a period of 3 years. The insurance agent said it would likely double next year. The tenant has the same problem with their home. They not only lost their business but have a mortgage on their home that requires insurance which is now $12,000 per year. So the homeowner insurance issue is equally as big for commercial properties.
I wonder if Trumper‘s will suddenly become supportive of government programs? At least when it comes to bailing out insurance companies.
Makes me sick to my stomach.
Not until they learn that socialism is not the same as communism.
And that the size of government isn't the issue, it's the lack of actual recourse when they abuse their power.
And for the people in the back: this applies to ANYONE who abuses their authority regardless of party. Single-party attitudes need to stop.
Ours was canceled because it was in a forest/urban interface area. We went without insurance for 2 years before we found another. We'd never filed a claim but the area faces high winds and fire threats.
Two years! How did you manage the stress and anxiety?
@@samalford3289 Just didn't think about it. I went 12 years in Chicago without car insurance because I couldn't afford it. So you have to take on risk.
Insurance exist, in supposed theory, to protect you in time of a covered loss, via shared risk management… However, when the crap hits the fan, insurance firms baulk at continuing their structured risk arbitrage, choosing instead to engage in areas of coverage that they believe they can confidently operate within a limited range of risk… in other words, insurance is a good thing until you, as the policy holder, legitimately has a loss for which you seek to make a claim against
Great story. I think that the solution is to stop building homes made a toothpicks. It’s the same in Florida, they have strict building codes for the walls, but the roof are made of cheap wood that are just stapled on with straps onto the concrete. We needsteel frame homes that will cost more money but then you won’t need expensive insurance because they could handle almost anything
My wife and I have home insurance through USAA for 22 years. We just received a letter from USAA addressing coverage for a dog and addressed things that we should consider about dog ownership. We had a dog for the first few years after we purchased our house but no longer have any. I thought it was giving us a heads up about the impact on our insurance policy.
Has it affected shareholder dividends or CEO pay?
Home prices don’t go down, they just become impossible for regular people that can’t pay cash for a home to buy. All the homes then become investment properties and the next generation will be all renting.
I’m a personal lines insurance account manager and everything he’s saying is accurate!
They went down from 2008 until around 2011.
Was about 4 minutes into this and he’s missing a big part of the insurance decision about Florida. Yes every year it cost more to rebuild because prices of materials and labor goes up. Also Florida is very unfriendly to insurance companies due to legislation. The average cost insurance companies pays out for claims can be 15/20% more per claim than surrounding states due to legislation and how courts deal with suits against insurance companies.
You are sadly misinformed. Flordia insurance companies have spun a sad tune but in truth they caused the litigation. Using nonlicensed adjusters, using third parity contractors for estimates, controlling and owning mitigation companies who do not dry structure correctly.
Bad faith again, again. Carriers deserve to get sued. They write policies, collect money, and don't pay on policy incursions.
Carriers in florida get a sweet deal and are helped by the governor and commissioner office.
Think that new time frame of compliance maters ??? Lmfao
Crystal ball...Carriers will issue a reservation of rights on every claim, recapture the timeclock to their discretion. The state bends over for the carriers, last commissioner now works as a lobbyists for the southern group, America's leading lobbyists!
Florida politics is why, Rick scott took carrier money, DeSantis takes it and they give carrier friendly deals, screw the people !
@@jamescooper7024Yep, I know people in Florida and you are 100% right on all points when it comes to property insurance in Florida and how cozy the current crop of politicians are with the companies. I heard about some very valuable personal perks the governor has been getting on top of campaign financing. Now, if you were talking about auto insurance in Florida, I would have responded differently. I’m very dubious about the personal injury industry in Florida, which advertises 24-7 on TV, radio, and billboards. Sure people need to be compensated when they get hurt in an accident, but friends have encountered people who are clearly scamming the auto insurance companies and the companies pay out anyway because it costs less than going to court. Very different dynamic.
If an insurance company drops coverage for a homeowner with a mortgage, can the lender (bank) take the home for breach of contract? This assumes the homeowner can't get or afford other coverage.
That is possible.
How much of the issue is a lack of trades men which drives up the costs of repairs?
There were over twenty four BILLION dollar weather disasters in the US last year. It’s Climate Change.
What is the dollar amount of insurance? No numbers are mentioned
That’s because the amount is different for every person. The algorithms that insurance carriers use are extremely complicated and are performed solely by software and AI.
insurance companies keep raising our rates over the last several years, mine home owners insurance has doubled every year for the last several years to the point it is getting too expensive to afford. yet anything happens and the insurance companies all say that isn't covered. they need to suffer a lose for a few years. if an insurance company leaves a state they should be told you can't come back for at least ten years and you will have to pay the state billions if you decide to get back in.
As someone who had a mid-sized home fire 18 months ago in California, I would argue its the over zealous state repair requirements that make it untenable for the insurance companies versus the number of homes "destroyed" . If I had let my insurance co. behave as they normally do , it would have cost them 5-8x as much ad what just repairing the home in a reasonable and safe manner cost me. They were great, I did it for less, they paid less and I think we were all happy. Many victims of flood and house fires see it as a gravy train to live in a "like lifestyle" home for months if not years, while the insurance company has to clean 0.99 cent forks at 80 bucks an hour for asbestos contamination...
I mean...as someone going through an insurance situation...why shouldn't my repairs be at the standard such that I get things to the level they were before the disaster? It's not about being a grifter...the amount of money I have paid into insurance over decades is not a small amount. This is what it's for. I don't want my home, which is my largest financial investment, to become devalued by replacing things that are of lower quality or standard. That makes absolutely zero sense. Because of inflation, yes, things of the same quality now cost more. That's not a me problem...it's not me asking for more than I deserve. It's me asking to keep the value of my home and it's appointments to the level they were at pre disaster. It's not a gravy train. Do you work for an insurance company?
Commercial insurance specialist here.
Climate change is not the main driver of the insurance carrier's losses. Hail, wind, and wildfire events are becoming more frequent, but the increase in frequency & severity of these events doesn't begin to account for the increase in premiums.
Litigation against insurance companies is reaching a breakneck pace. Judgements against insurance carriers totaling over $10 million have increased in frequency more than 10 fold over the last 10 years. Additionally, claimants are seeking legal counsel more often than ever before. This has lead to an explosion in 3rd party litigation financing and billboard ads for ambulance chasing personal injury lawyers inundate every interstate in the US. This isn't limited to slip & falls, Property claims are also frequently litigated as many pay for bare bones coverage and sue for more coverage when losses happen.
The US legal system is in dire need of reform or eventually no one will be able to get insurance, which will make all kinds of economic transactions infeasible due to the inherent risk of owning homes/businesses in this country.
Cui bono? Mostly the communists, since this will allow them another power grab. They'll will simply make the insurance industry a state run sector if they have the chance.
@toastedkiwi4358
Companies don't pay lawsuits their customers do. This sue happy country is screwing itself.
@@OIllllOCustomers sue because they know companies are not honest. There would be less lawsuits if companies didn’t try to weasel out of their responsibilities.
@@GFYWORLD
We didn't coin the phrase ambulance chasers for nothing now did we?
the only solution i can see, is for the banks to acknowledge that the mortgages are a risk to them, and they need to insure them at their own expense, otherwise there we will continue to see good hard working folks losing their homes for circumstances beyond their control
I just paid $3,316 for another year of homeowner's insurance. I'm strongly considering just not having insurance instead of renewing next time. If a storm damages my house, I'll just pay out of pocket. At least I'll be getting something for my money in that situation.
12% of homeowners are uninsured. Sometimes it makes sense, especially if you pay too much for insurance and you've got financial liquidity.
Stating the amount of the premium tells us nothing unless the insured amount is also provided. My home insurance cost $4,300/yr. That covers replacement value for the structure at about $2,500,000. The location is Farmington, NM (the Four Corners region).
Retrofitting homes, whether to be able to stand up to high winds or ember storms from wildfires, is expensive. At the same time, the insulation and wiring in older homes aren’t up to modern standards. Retrofitting homes takes time, skill and is expensive. And insurance companies aren’t reducing prices yet for work done
What changed in the last few years is home prices. Biggest rise in home prices in a 3 year period ever recorded. Insurance is just catching up.
More than the amount or severity of disasters don't you think it actually has to do with money. And what I mean is we know you talked about that but money in the terms of inflation. Everything costs so much more that's why insurance companies are losing money. It cost so much more money to rebuild a house. And that's why those secondary disasters are so much more catastrophic for the insurance companies. Because it takes less damage from an event that will still cost more money to fix. Inflation is just as much part of the problem as intensity of disasters.
@@craven5328 Thanks!
I think this article is basically climate change propaganda because there is no mention of inflation or lawsuits driving costs. If you want to make a climate change argument, put in the effort to discuss how much the climate change is to blame compared to other factors such as litigiousness and government spending causing inflation.
Maybe the manipulation of the market that resulted in values spiking to the moon has consequences? 🤷🏼♂️
So would the newer modular concrete homes be better to sustain the effects of climate change (in some areas with specific climate effects, of course)?
Thank you for a very worthwhile info.
You can’t get insurance if you’re wiring is not up-to-date are your roofs not a certain age they come now and inspect my home every year in Florida you have to have the pipes you have to have the roof you have to have the updated water heater. Well, you don’t have to have the pipes. I have new pipes, but I have 100-year-old house and they don’t want to ensure these because they’re not up to code. But 100-year-old house is standing up and it’s still here after 100 years, not these cheap houses that they put together was spit and cut corners
My homeowner’s insurance just chips away year by year on coverage.
I recently effectively lost wind damage.
The policy basically only covers a mortgage.
Without a mortgage they simply deny coverage.
What about skyrocketing home and construction costs? That must be a significant factor! 😮
Imo stop insuring high risk properties or cap the losses. So yes Karen, you can built that beach front property for a million but we aren't going to insure it. Or we will only insure it for 10% of its value. That's up to you and the bank if you wanna go fwd. Or we aren't going to insure that apt building you build right along a fault line. Overpriced properties contribute to this too.
Govt can offer insurance, especially with flood, IF they price riskier locations much higher than less risky locations. It will take time, but eventually people will move away from risky locations.
They already have such a program in place, but the risky areas are still over subsidized by lower than realistic government authorized rates. People in lower risk areas can get the current government limited amount of coverage for a much lower price but many deny that they would ever need coverage. More than 20% of floods happen in areas not labeled as risky enough for flood insurance to be mandated for home loans. Denial is not a river in Egypt.
Politically, government insurance will not price discriminate enough against risky locations and will become a means to subsidize beachfront property, etc.
Pretty soon, we’ll have more of a hybrid model. Instead of home insurance with a tiny $1000 deductible, insurance companies would price policies like the government and set a 10% of replacement value deductible. Maybe the more aggressive insurance companies could do 3-5%. Either way, we’re going to have to partially self-insure the first $20-100K of any losses.
Hence, the real housing crisis will soon start. We’ve only seen the prelude. Once insurance goes in that direction, only those living in high income areas can keep self-insuring. This forces even more people to reverse the COVID trends and move towards the high priced areas. They will be the new permanent renters as they can’t afford to buy the even rarer homes.
I’m standing by for that wave of new tenants to hit.
Hmmm…combined ratio to be positive? I think you want a combined ratio to be under 100%…not sure if it can be negative
More people moving into damage prone areas. Local governments in those areas too greedy to prevent people from building, in fact encouraging people to build there to raise their property taxes. Storm damage later (totally predictable) is not the local governments problem. If people abandon their damages unrepairable homes, they cede to the local government who re-sell them. Yet another income stream for them. Yes, absolutely go without insurance. Go without the mortgage too. Build your own home. Build it to withstand the likely damages. Do your research beforehand on the oand and know the issues and at all costs avoid any flood prone areas. There is no solution for that. Even building on stilts means that your cars and anything on the ground will be destroyed.
Yep in new orleans we only have the option of 1 insurance
Had a hailstorm & insurance paid for a new roof. Got 5 bids & went with the best one. New roof plus re-decking was just barely covered by our insurance payout including depreciation. Fortunately we caught a break & they were out of the class 3 shingle on the day they came out, so we got the class 4 version of the same shingle for no extra cost. They certified to our insurance that we got class 4 shingles & we actually got a break on our policy premiums. Knowing how things are going in the rest of the country, I feel incredibly lucky that our house is “hardened” and we didn’t have to spend out of pocket on it. We definitely did not help the insurance company’s combined ratio, that’s for sure.😂
home insurance has roughly doubled here in the past 4 years, it's becoming a significant slice of the annual budget , and the companies do everything possible to find an excuse not to honor the deal, more and more of us are choosing, reluctantly, to take our own risk
From one agent I don't know really if I am covered or what the rate is. Wind, hail and the roof are not covered. Several companies won't insure me because poor roofing work on part of the house years ago which I will replace when I can find somebody who knows what they are doing and have the money.
Rampant crime has driven up car insurance in Washingtonton State.
Rampant Leftism has driven up car insurance in Washingtonton State. Fixed.
Bad weather and climate change are separate issues.
Some people hate what they call “Big Government”, others strongly call for it??
Someone explain that please.
The high insurance rates that have to be charged, are a great indicator of what Climate Change is doing to "regular people".
Sigh if the kids can't take the heat get out of the kitchen.
No one was forced to start a insurance company 🤦♂️
thats why they are leaving the places that are least profitable...
Short sighted - I assume you have home insurance. This may happen to you too.
I don’t understand your comment. If you have a mortgage, you are contractually bound to have homeowners insurance. Which is the majority of the United States. In our community, they are dropping left and right. All our neighbors are very worried or have already been canceled. The sad thing is that the elderly and working class who built this community now are being priced out. Because it seems our only option is something called the California fair act. Which is actually, an exorbitantly priced insurance plan that should be called the California unfair act. Lol but just another reason that California are fleeing. But it’s not. Everyone is being touched by these new phenomenon.
NYT understands the unintended consequences of new government programs? Color me shocked.
I'm not convinced that Florida's market problems are even really remotely due to climate change... Everyone is trying to rip off the insurance companies down here. Not saying that these companies are good or anything, but the shear number of people that make a living off of claiming wind/hail/other storm-related damage that isn't anything other than age, normal wear and tear, fraud, or other is absolutely nuts!!
It was time someone pointed this out. I have watched this for years in North Carolina and now in Florida. State legislators pretend it doesn’t exist.
Not in Fla, but there has been a kind of industry built around this. There are roofers who go around drawing up damage reports in such a way as to use supposed storm damage as a way to get insurance companies to pay for routine roof replacement.
In the past couple of years, even before rates soared, the companies responded by making roof claims pro-rated. In other words if you have a 20 year old that needs replacement due to storm damage, they cover the depreciated cost, not the new cost.
@@kenofken9458 I work in the industry and see this crap all the time.. Then again, I'm a forensic engineer and only get called out to homes where there is either an actual structural problem, or there is a suspected bogus claim so I only have a certain perspective of the entire industry. But yes, there are many roofing companies/PA's out there that are super fraudulent or claiming things that are definitely not storm-related.. Or putting the use of a crane to install a roof on a one-story house. Some of it is ridiculous.
But also, the reasons that insurance companies are spiking is because you have to have so much in their reserve and all the insurance companies are allowed to Cherry pick and they’ve moved out of the states of Florida and I guess New Orleans or Louisiana and they don’t wanna ensure here anymore and so we have one companyor two companies that insurance in Florida and then they have to have so much in their reserve and then they raise it. It’s a serious problem that the government needs to handle but all seems to do is problems not fix them.
I’m in Oregon and I can’t get homeowners insurance. It’s not just Florida.
@@bonniechase8245Where?
A 1 in 3,000 chance your house will burn down. The number one cause of a home loss in the United States. So if you live in a place that doesn't experience tornadoes hurricanes mudslides floods earthquakes....don't buy it if you can afford the loss, even then. I can!
So for 3,000 $350,000 homes and an insurance premium of $2,000 A year the insurance company makes 6 million every year. In a location such as mine. Instead I would be paying for people at higher risk who don't pay a premium reflective of their risk.
IN FLORIDA OVER 1.5 MILLION PEOPLE BUY HOME OWNERS INSURAANCE FROM THE STATE ALSO FLOOD INSURANCE FROM THE BOV IS STANDRD
Now go after the nursing homes..
Inflation is an issue. Were looking at years when the pandemic caused materials to double and triple. For example a 2x4 was $12 at ine point. Wood has come down but many materials and lobor has not. If you take climate change out of the equation rates were bound to skyrocket.
Don’t worry, Florida and others red states, I’m sure that we in the blue states will continue to subsidize you and make it possible for you to live, like we have for about a hundred years.
@markroberts8975
You sound ignorant seeing as Allstate pulled 75,000 policies out of California
Just like medical benefits…high deductible plans are worthless
People are paying such high taxes and premiums with not much in return. You get thrown to the wolves of private industry who could eat you alive at any time. Were a very expensive Somalia, I swear the pitfalls and headaches of no governance is nearimg the same.
What a surprise when privatization stops making money they leave, having solved nothing and made things worse by not solving problems and shifting government focus away from real problems because "privatization" is dealing with it right?😅😅
Own rentals. Have been living with this problem.
This video doesn’t quite realize that it is about climate change.
It would be better if every question and every answer didn't begin with the word "So..."
I'm in Florida and I've been saying this for years.
Florida accounts for only 9 percent of the country’s home insurance claims but 79 percent of its home insurance lawsuits, many of them fraudulent. Latin America brings you this gift, but not gratis.
Hurricanes have not become more frequent or more powerful.
www.google.com/search?q=are+hurricanes+becoming+more+powerful+and+frequent+in+the+USA&oq=are+hurricanes+becoming+more+powerful+and+frequent+in+the+USA&gs_lcrp=EgZjaHJvbWUyBggAEEUYOdIBCjMxMjQ5ajBqMTWoAgmwAgE&sourceid=chrome&ie=UTF-8
Good story, but each company and each local market are highly specific. His math doesn't quite math.
As a half century climate watcher, this is interesting to me (1956 boy).
Energy storage is something that would really help.with resiliency. It would be nice if whole home generators could be more affordable and/or there were plans to get something distributed into places where individuals cant afford energy storage. Not sure what that would look like - a large central hub where you could charge up your energy storage before storms...something that makes it accessible and affordable.
The problem is that means changing existing infrastructure...and we seem to be terrible at that for...reasons. (Cough...the fossil fuel industry lobbyists).
@e.h.4933
Build a battery or solar panel without petroleum products.
Please note the lower confirmed number of women and children killed also lowered the confirmed number of men killed. The total killed did not change, just for 10,000 of the dead there is no confirmed identity, and without the identity they won’t count the categorization, even if the remains are 2 feet tall (child) or possess a vagina (woman). This is being misrepresented as a reduction in the carnage while it is not that at all.
The problem is insurance fraud. I had several roofers reach out to me offering to give me a “free roof” because of “hail damage.” Replacing totally ok roofs on an insurance claim a whole industry now.
@samharris82
I remember back a few years ago we had a small hail storm and the whole neighborhood was getting new roofs.
I guess insurance needs to go non-profit.
This is also affecting car insurance rates.
@jamesbutler1831
Well EVs that get totaled in minor fender benders are not helping auto insurance rates.
It hasn’t happened “all of a sudden” although I know most people still don’t get it, there are others who don’t live in a bubble and took action years ago. Adjusting is key e.g. if you want to live in a forest, you don’t build anymore, you have a tiny home that can be moved in case of a wildfire.
@lulufulu4867
But they need their McMansions that they clearly can't afford to rebuild on their own to feel superior 🤣
Times has become untrustworthy!
Yep it's happening
Damn it sounds like insurance is and always was a scam.
I wish yall would have spent more time talking about examples of climate change as it applies to insurance with cost examples.
I do not believe they paid out me the they raked in.
This is a great video to send to your climate change denier friends!
Can't you people come up with better propaganda?
So climate change is the sole cost? Couldn't be inflation, higher building costs, higher labor costs?
Number of events multiplied by severity of events multiplied by cost of materials and labor. That’s what insurance has to cover. All of those numbers are going up, way up.
Silly me,... I thought insurance did not cover "Acts of God". Thus hurricaine, tornado, wildfire costs...um, "not our problem!" In Florida, the laws were changed to force insurers to pay hurricaine costs.
Nonsense.
8:49 If home values fall, they will be cheaper to insure.
No. Insurance costs are based on costs to rebuild the home. Construction costs fluctuate very little--since WWII.
Just got notice today about our insurance canceled. We are in California fire country.
terrible news, I'm a CAian too. good luck.
See CalEarth buildings in Hesperia, CA
Insurance industry is screwing No. California big time. State Farm distruptor top snake. Look at the CEOs salary.