Real Estate Crash thread

[neufox47]

Yeah well. If we can get our mortgage paid off in the next couple years I wouldn't be averse to self insuring. I don't think our house is worth much compared to our lot anyway.

Might be different where you are but in many parts of the west debris removal will cost you $100-$200k to scrape all the contaminated soil from the house fire off your lot. If you’re going to self insure you should have enough money to build / rebuild, at least that’s what they teach Risk Managers.

[neufox47]

Been shopping for insurance after getting notice of non-renewal. Best I've done is $3500. Almost triple my current and that quote is $1200 less than 2nd best. Albeit, my Lemonade premium was $1200 less than any other quote. So, not that outrageous in the larger scheme of insurance inflation and general inflation. Still hurts.. it's gotta be hurting home sales around here. High rates and high insurance. The next best quote I got was $4600.

Hoping chaos creates opportunity down the road.

Makes sense given your current insurer is Lemonade. Every underwriter looked at what they were writing and said, huh?

[4matic]

Right. Lemonade is weak financially. Probably couldn’t get re-insurance for California. They threatened to have car insurance for years and can’t get it done.

I saved $1k a year over next lowest quote before so I’m still at least break even for a few years. If we go without catastrophic fires for a few years maybe insurers go back to growth mode and compete for business. Fair plan will have more than a million insured soon enough. It’s big risk but that’s over $5b in revenue.

[yeahman]

Might be different where you are but in many parts of the west debris removal will cost you $100-$200k to scrape all the contaminated soil from the house fire off your lot. If you’re going to self insure you should have enough money to build / rebuild, at least that’s what they teach Risk Managers.

Yeah. Do they teach risk managers that insurance is a fucking scam from birth to death? Know how I know? Look at all the fucking commercials they run.

[skaredshtles]

Yeah. Do they teach risk managers that insurance is a fucking scam from birth to death? Know how I know? Look at all the fucking commercials they run.

It's a scam until your house burns down.

[yeahman]

It's a scam until your house burns down.

Sure, they feed on irrational fear. What percentage of people does that happen to? Think of all the money wasted.

[yeahman]

And even if your house does burn down they're going to try to figure out a way to fuck you.

[skaredshtles]

Sure, they feed on irrational fear. What percentage of people does that happen to? Think of all the money wasted.

It's a very, very tiny percentage. But if it happens to be you, ¯\_(?)_/¯

It's an unfortunate necessity, IMO, for things like houses. For most people.

[4matic]

And even if your house does burn down they're going to try to figure out a way to fuck you.

That’s what lawyers are for

[byates1]

You just love paying for all kinds of shit huh

[byates1]

Roadside garbage wind chimes bro. Let go. Be free

[liv2ski]

Sure, they feed on irrational fear. What percentage of people does that happen to? Think of all the money wasted.

Yup, while Warren Buffet laughs at the profits

[Conundrum]

If you’re going to self insure you should have enough money to build / rebuild, at least that’s what they teach Risk Managers.

Yeah. Do they teach risk managers that insurance is a fucking scam from birth to death? Know how I know? Look at all the fucking commercials they run.

I guess if you need to buy it, it sucks. But so does a lender requiring protection right? If you want to self insure, you might want the resources available if something goes south. Insurance companies are dicks but sometimes protecting your biggest asset that you borrowed to "own" has some stipulations.

[anotherVTskibum]

Sure, they feed on irrational fear. What percentage of people does that happen to? Think of all the money wasted.

It's a bet against yourself, effectively. I'm well aware that the money I pay on insurance policies is just a hedge against something Bad happening, and statistically it's unlikely to pay off. It annoys me every time I make a payment or see an auto debit.

But if you're the outlier for whom the Bad thing did happen and you didn't have enough cash accessible to cover the loss, the impact is going to suck.

Small-scale example: I pay for doggie health insurance for my dog. I hope to never use it, but it's worth $73/month to have a reasonable expectation that I'm never going to have to put him down because I can't afford veterinary care that would keep him alive.

Understanding what you're getting for coverage (amounts and types) is important so you can weigh the costs against the risks and impacts. I never carried collision coverage on beater cars because if I crashed them, the better financial move was to replace them. But I carried greater than minimum liability because I didn't want to be paying off someone else's car and medical bills for decades, plus I figured the insurance company would be better motivated to not agree I was at fault if they were on the hook for a bigger claim. YMMV.

[Foggy_Goggles]

Really what you are buying with insurance is a reduction of volatility. Absent the low probability high pay out event, the NPV of the decision will be negative. Many people can't self insure because the either lack the budgeting backbone to build reserves or they don't have the asset base to absorb the negative event on a cash flow basis.

If they rebuild cost for your house is $500k you don't have a mortgage (no insurance requirement), run through that Monte Carlo and see which one makes more sense for you.

[skaredshtles]

Really what you are buying with insurance is a reduction of volatility. Absent the low probability high pay out event, the NPV of the decision will be negative. Many people can't self insure because the either lack the budgeting backbone to build reserves or they don't have the asset base to absorb the negative event on a cash flow basis.

If they rebuild cost for your house is $500k you don't have a mortgage (no insurance requirement), run through that Monte Carlo and see which one makes more sense for you.

Yep - I'm in that situation and I definitely ain't rollin' them dice.

[LHutz Esq]

I've had one big claim for a commercial property.

I will probably not live long enough to pay the premiums to put me in the negative.

Not having insurance likely would have had me bankrupt- and in my profession that has complications.

Not to say I didn't have to fight like hell to get the payout I was contractually entitled to.

Your mileage may vary.

[RootSkier]

And even if your house does burn down they're going to try to figure out a way to fuck you.

I will never defend insurance companies here but can point out that if your house burns down in Montana and is a total loss, the insurer is on the hook for the full value of the improvements as stated in the declarations:

33-24-102. Insuring improvements -- insurance equal to true value. Whenever any policy of insurance is written to insure any improvements upon real property in this state against loss or damage and the property insured is considered to be a total loss, without criminal fault on the part of the insured or the insured's assigns, the amount of insurance written in the policy must be taken conclusively to be the true value of the property insured and the true amount of loss and measure of damages.

In contrast, if your house is merely damaged, like in a hailstorm, get out the lube because the insurer will do everything they can to fuck you over, and they are experts at it.

Further, and on a slightly different topic, don't overlook the other types of coverage you get from a regular homeowner policy, like personal liability coverage. That shit DOES kick in more than you'd think and just the fact that the insurer has to pay for a lawyer if you get sued for something crazy is an enormous benefit because most lawyers can't even afford a lawyer.

/not legal advice, etc.

[skaredshtles]

I will never defend insurance companies here

Yep. Me neither.

And the more I think about it... insurance is more of a racket than a scam.

[Conundrum]

Yep. Me neither.

And the more I think about it... insurance is more of a racket than a scam.

The more you look under the covers, the more you will think this. Remember that most insurance companies are for profit. It’s not socialism.

[Shredhead]

I’d appreciate Hutash’s POV.
He suffered a catastrophic loss.

[Ted Striker]

Yeah, it's definitely a racket. They pay dividends ffs.

But liability (in all cases - house, car, job...) necessitates it.

[BCMtnHound]

The House always wins.
Don’t hate the player, hate the game.

I dislike insurance. But with a wife and child, could not imagine life without the peace of mind.

And typical Canuck plug - basic healthcare (or any basic social safety net that guarantees basic human dignity in a modern sense) should not require for profit insurance.

[XXX-er]

even with no kids I would be fucked if this place burnt down, only people who self insure do so cuz they are too far from any fire protection to do anything but let it burn

I remember the morning i walked out the front door and seen that some of LHutz's business files had drifted a couple blocks on the wind to my front lawn

[Toadman]

Residential RE is just a beast on steroids.

The median monthly U.S. housing payment hit an all-time high of $2,747 during the four weeks ending April 7, up 11% from a year earlier. Housing payments are soaring because home prices and mortgage rates are high. The median home-sale price is $378,250, up 4.5% year over year and just about $5,000 shy of the record high hit in June 2022. The average 30-year fixed mortgage rate is 6.82%, below the near-8% rates hit last October but still more than double pandemic-era lows.