The home insurance market is crumbling. These owners are paying the price
The home insurance market is crumbling. These owners are paying the price
The home insurance market is crumbling in New Orleans, leaving Alfredo Herrera with few options for coverage — and skyrocketing insurance premiums.
The home insurance market is crumbling in New Orleans, leaving Alfredo Herrera with few options for coverage — and skyrocketing insurance premiums.
Herrera, 35, works in finance for a local bank. He bought his 900-square-foot home in New Orleans’ Mid-City neighborhood in 2020 for $270,000, and lives there with his partner.
In 2022, he paid $1,600 a year for home insurance. But last July, his insurer canceled his coverage, saying it was leaving Louisiana.
In the past, acquiring or keeping homeowners’ insurance didn’t present much of a problem.
But as climate change increases the frequency and severity of extreme weather, insurers — especially those in areas most impacted by floods and fires — are raising their premiums, or pulling out altogether, impacting the affordability and availability of home and fire insurance.
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Insurance rates are the true Canary of Collapse. If the money men have calculated that certain areas are going to quickly become unlivable, then people should listen.
Of course it's not trivial to just pack up your life and move but it's about to become super necessary, unfortunately.
Yeah but just picking up your life and leaving isn't always a possibility simply because you have so much investment already where you're at. I mean how the hell do you get any of the money that you have invested in the home... it's uninsurable who do you sell it to.?
You're completely right. Many people are about to get totally financially ruined at a minimum. There's going to be a lot of climate refugees from these areas who've lost everything.
Eventually someone is left holding the bag on any house really. Unless the property increases in value past the value of the house, then it can be torn down and a new house built while keeping the price comparable to other nearby homes.
Yes but in this context it about the scope of the situation. You are not talking about just one person left holding the bag. We are talking about entire towns soon maybe states. At what point do we actually step in as a country . you have huge swaths of people that are not going to be capable of financially moving on because they have sunk all of their everything into that ground and you're telling them they have to basically abandon it. That will not go well.
I can't really say what will happen. Neither can anybody really. Maybe the government should step in, maybe they shouldn't. Corporations should be paying it, but obviously, that's not happening either. People have abandoned everything and moved before. People headed here from the 1600's and never stopped, in the 1800's they headed west. Owning property holds a certain amount of risk that people need to accept.
All the poor fuckers who don't have a house aren't going to have the government find them one and hand them to it. Replacing 5% of the single family homes would cost about 2T given that houses aren't worth the same, the unit replacement cost on rich kids houses is going to 2-3x the cost of an average house AND the fancy real estate's propensity to be situated near water in what will be future flood plains the majority of that money will go to those who already have the most advantages.
Conversely if those people aren't absolute morons those properties are absolutely saleable at this point irrespective of it being expensive to purchase insurance. If your property is bound for the bottom in 20 years sell it now while people aren't too cognizant of this issue before your fortunes go down with the ship.
What if those towns just refused to pay mortgages on homes that can't be insured?
Are the banks going to send armed squads to evict a whole town?
The answer is always yes. Petty bullshit knows no bounds.
Do you just not know how this works? The authorities will be doing evictions and yes they will take everything. There is literally a company trying to essentially sell a town right now.
Herrera shopped around for a new plan, but he struggled to find a policy. Louisiana Citizens, the insurer of last resort for property owners in the state, was out of the question. It would have cost more than $7,000 annually. Herrera eventually found a policy with a small company in the state that charged him $4,930 annually — a 208% increase from what he paid in 2022.
There were at least 2 options $5000–$7000. Sell to someone at a discount with the understanding that buyer is willing and able to bear at least $5000 in annual insurance costs. Do this before its actually uninsurable.
It would be like selling crypto. The "greater fool" theory of seeking things. It's ok to have an asset. But you don't want to be the one holding it when the market tanks.
Property is selling very high in the parish I'm from adjacent to orleans parish. People have forgotten about Katrina and have faith in the levee system. Property is also selling high in New orleans as well unless it's a dog shit area.