Real Estate Crash thread

[RoooR]

Last year nationwide home and car insurance companies paid out more in claims then they took in as premiums; https://www.npr.org/2024/03/03/12339...ters-inflation

Problem, with making home and car insurance "public" is the people with the most expensive cars and houses are rich. It would be highly regressive.

[XXX-er]

Last year nationwide home and car insurance companies paid out more in claims then they took in as premiums; https://www.npr.org/2024/03/03/12339...ters-inflation

Problem, with making home and car insurance "public" is the people with the most expensive cars and houses are rich. It would be highly regressive.

" A survey by the Insurance Information Institute last year found 12% of homeowners had no insurance, up from 5% four years earlier. Going without coverage is risky "

thats ^^ a pretty good quick read on why rates are up

[dunfree]

" A survey by the Insurance Information Institute last year found 12% of homeowners had no insurance, up from 5% four years earlier. Going without coverage is risky "

thats ^^ a pretty good quick read on why rates are up

lol, no

[yeahman]

The whole idea of insurance is that it is supposed to be an AFFORDABLE way to mitigate risk. If that's no longer true, people will be forced to opt out and roll the dice.

[Conundrum]

The idea of insurance is to finance risk and spread the cost over a larger group. The risk drives the cost unless you want it to be a gov controlled social program. Affordability is all relative. Affordable can be is the premium less than the loss it's protecting and the ratio is different for everyone. You could ask can you afford to lose whatever you are insuring without compensation? Can you afford to insure it? Can you afford to have whatever you are trying to insure? Are you willing to make a choice to sell what you are trying to insure and buy something with less value or in a less risky location?

There are four ways to deal with risk-prevent, transfer, finance and mitigate. If you want to get more philosophical, financing risk would be a lot cheaper for a lot of reasons. Eating healthy and exercising, not rebuilding in areas that are known to flood or burn, not driving cars with with $5,000 bumpers and putting your phone down (prevention). Not getting a new roof paid for by insurance for weather "damage" when the roofing company knows it's more wear and tear, having leak detectors installed on your mostly vacant vacation home, firewising your large property in the woods, etc (mitigation). Risk transfer is mostly contractual.

I live in a fairly risk free area close to a fire station and try to maintain my home. Do I want my premiums to go up because someone has a beautiful second home in a fire prone area without a staffed responding fire department nearby? I'm all for spreading risk but the question has to be what is fair. I'd be willing to pay more for that risk but I would like some fractional time in their vacation home in exchange.

There are plenty of good insurance companies that don't advertise much if at all. My experience is the companies that don't advertise generally pay claims with less hassle and have broader coverage contracts. I send my insurance premiums to those companies.

Edit-Probably a good reason for an insurance thread and let real estate be real estate.

[RoooR]

The whole idea of insurance is that it is supposed to be an AFFORDABLE way to mitigate risk. If that's no longer true, people will be forced to opt out and roll the dice.

Do you have any evidence that payout rates have changed significantly? Or is it just more expensive houses in more disaster prone areas?

[schuss]

Do you have any evidence that payout rates have changed significantly? Or is it just more expensive houses in more disaster prone areas?

Turns out inflation of construction labor, car prices and materials impact price of products that use those, weird.
As someone that works in insurance, pretty grim outlook given many states won't let you price based on the future outlook of climate change and as pointed out, more has been paid out recently than taken in by a decent amount.
Also a bunch of car safety trends that made it cheaper have been undone by for fender benders now involving expensive sensor replacements as well as people too busy on their phones to pay attention causing major upticks in severity/frequency.
Both Florida and California are reasonably fucked if they don't reform as FL has an absurd fraud/litigation rate coupled with increasing hurricane risk as waters warm while CA takes a year to approve rates that are too low by the time they're enacted.

Want lower rates? Get people to drive better and stop building in flood and fire prone zones.

PS don't lump us in with those health insurance shitlords.

[Name Redacted]

Insurance rates for HOAs in condo buildings have been going crazy around here. One of our condo buildings was dropped from their insurance and had to reinsure at 5x higher rates. This means the hoa fees will be going through the roof. Apparently it has been happening all over the county at least.

[XXX-er]

As someone that works in insurance,

old fucks on computers have just told me that you ^^ are the problem

[schuss]

old fucks on computers have just told me that you ^^ are the problem

Old fucks and not understanding complex problems, name a more timeless combo. Right, I'm sure it's the marketing spend everyone already pulled back on. Sure.

[Conundrum]

Insurance rates for HOAs in condo buildings have been going crazy around here. One of our condo buildings was dropped from their insurance and had to reinsure at 5x higher rates. This means the hoa fees will be going through the roof. Apparently it has been happening all over the county at least.

How old are the condos and what updates have been done? Condo owners hate assessments for property improvements especially when it's not for something cool like a pickleball court or pool. So, a bunch of old ass buildings that leak and burn and are much more expensive to repair than people think. Add in a board of owners that probably has no idea about construction or insurance so they don't manage not only the property very well but the finances because they don't want their personal bills to go up. Sprinkle in vague CCRs, owners trying to make a buck by STR'ing so liability hazards going up, and the fact that they won't make the tenants/owners take their grills off their balconies and patios even though it's against NFPA and almost every state fire code and yeah, insurance companies are not liking multi-family habitational risks these days. I'm glad my homeowners is with a company that doesn't write multi-family hab. They also don't write in CA or FL. Probably helping keep my premiums down.

[Conundrum]

Right, I'm sure it's the marketing spend everyone already pulled back on. Sure.

Schuss, you hear about the Nationwide layoffs and moratoriums/non-renewals? Seems like a bit more than marketing budgets. The rest of you, remember the Nationwide is on your side jingle? Well not really anymore. Don't just buy the insurance you see on TV.

[XXX-er]

Old fucks and not understanding complex problems, name a more timeless combo. Right, I'm sure it's the marketing spend everyone already pulled back on. Sure.

well they ARE paying more for a case of macro brew

[Mazderati]

P&C execs must have missed the payouts memo.




Insurance Executives Paid Millions in Compensation as Rates Skyrocket: CFA Findings
https://www.insurancejournal.com/new.../11/743595.htm

[byates1]

I'm going to build on a fault line in a tinderbox forest at the base of an active volcano so I can complain here about being uninsurable

[Conundrum]

Largest home builder CEO makes about $15m a year, largest hospital system CEO at about $15m and largest auto manufacturer CEO makes about $29m. It's easy to place blame on exec comp but maybe some of the folks the claims money ends up with could give a little too. I guess my point is most large for profit companies have highly comped leadership. The numbers above are not shocking. Look at banking during the great recession. Those dudes should have gone to jail but got bonuses instead. That stuff isn't going to change regardless about what industry we're complaining about.

[XXX-er]

I can remember IBM hiring Lou Gerstner as CEO and wondering what a guy who made shredded wheat could know about computers but he turned it around and i started getting raises again so IME Lou was worth every bit of the coin they paid him

[4matic]

https://www.cbsnews.com/sacramento/n...ble-insurance/

I live in El Dorado Hills. Same County. I hope the initiative set in motion last year gets approved. I’m right on the edge of the higher risk fire map but realistically it can’t happen where my house is. A couple miles away. Absolutely!

I got a non-renewal and went with an unadmitted carrier. My rate went up 150% and I feel lucky. With an admitted carrier it would have been more than 300% increase.

As said, it has to be affecting home sales in the area.

I like the idea in that article to allow parcel specific plans

[smmokan]

P&C execs must have missed the payouts memo.




Insurance Executives Paid Millions in Compensation as Rates Skyrocket: CFA Findings
https://www.insurancejournal.com/new.../11/743595.htm

This is how most of America works... the rich get richer, while everyone else struggles to pay the bills.

[Mazderati]

That stuff isn't going to change regardless about what industry we're complaining about.

Certainly not with people ready to carry their water.

[Conundrum]

Not carrying water. Giving my personal view of the industry and being real (I agree that it's a bad look and shouldn't happen) that CEOs at that level may be asked to "retire early" but their replacement will absolutely be another highly comped individual.

[schuss]

P&C execs must have missed the payouts memo.




Insurance Executives Paid Millions in Compensation as Rates Skyrocket: CFA Findings
https://www.insurancejournal.com/new.../11/743595.htm

I mean, exec comp is out of control everywhere but most took 20-30% paycuts last year as those are prior ones. As far as layoffs - yep, why I said it was grim, lost some friends in the last one and it ain't the last.

[jackstraw]

Want lower rates? Get people to drive better and stop building in flood and fire prone zones.

Come on now. Many of those buildings have been there for half a century or more. Have you been to the beach down the street from where you live lately?

Fuck the insurance companies. All of a sudden their fat profits aren't as fat.

That industry has been raping Americans for a long time. How about cutting your advertising budget by...hmm, let's say a billion, Geico. That may make it easier to insure the average Joe just trying to live where they grew up.

[goldenboy]

Insurance rates for HOAs in condo buildings have been going crazy around here. One of our condo buildings was dropped from their insurance and had to reinsure at 5x higher rates. This means the hoa fees will be going through the roof. Apparently it has been happening all over the county at least.

Yep. My HOA had a roof leak that damaged another unit and decided to pay out of pocket. Annoying as shit since that's exactly why you pay insurance but they were scared of getting dropped. A nearby HOA filed claims for some things and they were dropped, just like you said. There's a ski in ski out condo there that no one is touching even at 500K because the HOA/insurance is so expensive now. So I guess I'm glad my HOA did what they did..

[schuss]

Come on now. Many of those buildings have been there for half a century or more. Have you been to the beach down the street from where you live lately?

Fuck the insurance companies. All of a sudden their fat profits aren't as fat.

That industry has been raping Americans for a long time. How about cutting your advertising budget by...hmm, let's say a billion, Geico. That may make it easier to insure the average Joe just trying to live where they grew up.

There's this thing called climate change making yearly risk escalate. Being there for 50 years doesn't mean it can't get wiped out next year.
Geico cut by nearly 500 mil, marketing budgets are the first to go.

https://www.spglobal.com/marketintel...spend-81079056