quote:

Originally posted by 6guns:

quote:

Originally posted by konata88:
Will lenders start to require something like PMI if a HO doesn't have insurance?

My guess is owners who have a mortgage will be required to have insurance no matter what. Once they pay off their mortgage, they could drop insurance. As far as I know, PMI is only for those not having a certain amount of equity.

Correct!

When Rush was alive he did a couple of broadcasts on the insane premiums he was faced with insuring his oceanfront estate (which his widow later sold for something like $125 million). And he concluded that by not paying the premiums he could in a very short amount of time (something like 5 years) have saved enough to pay for any major destruction a hurricane could cause.

We actually looked into doing this with our (much more modest) beach house but in the end decided to sell it and move to the mountains.

This message has been edited. Last edited by: smlsig,

None of this is surprising and has been on a "slow roll" for years. My insurance company routinely drops any existing customers who move to California, I understand, because of the wildfire risks. Not only are people dropping coverage for homes in California, but I understand the same thing is happening in other parts of the company for health insurance. Even here in SC people are more concerned about the cost of premiums than they are about the cost of recovering from the losses due to hurricanes. People simply cannot afford, or refuse, to pay high premiums. In coming years, this is going to be a serious nationwide crisis.

quote:

Originally posted by Scuba Steve Sig:
Where I live in the Bay Area, a “million dollar McMansion” is the price for a little condo…

You have to bear in mind that the median price of a home in The City is now over $1M

quote:

Originally posted by PR64:
The Zillow price for our AirBnB we stayed at, which was not luxury, was 100yrs old and seemed about average for the area was:

$2.3 Million

Location location location.

That's true. After all, you were in the Outer Richmond...a block and a half from the Park and within walking distance from the ocean.

I used to live not far from that area and actually think I've been in that house. They've done a very nice job of updating it and landscaping the backyard

Whenever I see the prices of houses in that area, I'm reminded of how my father decided not to buy when we had a chance back in the 60s. I had a Dream House I used to walk by, on the other side of Geary Blvd, with a long driveway and electronic gates holding back two Dobermans. It sold a few years ago for $13M. Then the buyer bought the house next door for $21M because the original property/house wasn't big enough...it was only about 3200 Sq Ft with 3BR. One of it's claim to fame was that it was originally a Frank Lloyd Wright design which included a bridge/walkway that extended out over the ocean to an circular enclosed observation deck/bedroom...the original owner couldn't afford to have Wright build it

Well they say Like a good neighbor. Where is Jake? Or better Gavin Newscum?

quote:

Originally posted by 9mmepiphany:

Whenever I see the prices of houses in that area, I'm reminded of how my father decided not to buy when we had a chance back in the 60s. I had a Dream House I used to walk by, on the other side of Geary Blvd, with a long driveway and electronic gates holding back two Dobermans. It sold a few years ago for $13M. Then the buyer bought the house next door for $21M because the original property/house wasn't big enough...it was only about 3200 Sq Ft with 3BR. One of it's claim to fame was that it was originally a Frank Lloyd Wright design which included a bridge/walkway that extended out over the ocean to an circular enclosed observation deck/bedroom...the original owner couldn't afford to have Wright build it

Does it have a yard or at least a 2 car garage for that price?!?! I think I saw some properties with 2 car garages a block from the beach, but they still didn't have a yard. I doubt many SF'ers have more than 1 car though.

That AirBnB's landscaping in back was maybe a 20'x30' area of pavers and shrubs. It looked nice but we couldn't access it as there was a rental apt on the 1st floor. The property next door was trying to grow grass on their 20'x30', I don't know if they actually had a lawnmower to mow that or if the neighbors all share some rechargeable one. None of these places have a front yard that's for sure.

Houses in the City of St. Louis are similar in size to those in San Francisco on similarly sized lots, but they have basements due to the lower frost line. So they are taller off the street and none really have that garage underneath/entry from the front like SF and instead have an alley with MAYBE a garage in the back to keep your car and lawnmower and everything else from getting stolen. That leaves a small, sloped unusable front yard you have to mow or landscape.

quote:

Originally posted by Scuba Steve Sig:
Does it have a yard or at least a 2 car garage for that price?!?! I think I saw some properties with 2 car garages a block from the beach, but they still didn't have a yard. I doubt many SF'ers have more than 1 car though.

Oh this was a nice house.

It had a 3-car garage and a detached guesthouse. The driveway sloped away from the street and was close to 30 yards long. The living room overhung the cliff and overlooked Baker's Beach...which leads to the Southwest end of the Golden Gate bridge


It's the wall of glass you see set into the cliff


This was Wright's proposal

I know this is about California, but I have to comment!

I had Chubb policies, including Home, Auto and Umbrella for over thirty years
Without a single claim for anything. Then, a month or so before renewal, I received a notification
Of non-renewal! I had to go barefoot (no homeowners coverage) for about
Six months until USAA underwriters provided me with coverage, albeit with very high deductibles.

I am still paying exorbitant premiums, however, at least I have coverage going into the Hurricane Season.

Florida does not have earthquakes, but we do have sinkholes!

Insurance carriers did this in Florida, now in my state of Texas. Looks like Cali is next. Florida from hurricanes and storms coming in from the sea. Texas from the same as well as tornado damage, hail damage, etc. Cali with the fires. My homeowners went up $1,000 in 2023, and another $1,000 in 2024. The insurance carriers are raising rates significantly or they will pull out of the state. I had a long conversation with my broker in January of this year about this as that is when most of my policies renew. It sucks. I had to raise my deductible this year. It’s getting that expensive.

Add Allstate to the list raising rates; we have car and home policies through them and were hit a couple of months ago with sudden, unexplained rate increases. When we looked into changing companies, we discovered that jumping to a new carrier didn’t save us any money. It seems to be a coordinated trend across the board.

I was notified last month that Pekin, a division of Farmers, will no longer be covering properties or cars in Iowa effective July 31. I have been researching new insurance and yes it is all very expensive.

quote:

Originally posted by konata88:
But if there are no providers willing to ensure you, then I would guess that lenders will want to cover their loans (which in a sense is what the home insurance does). So, in the absence of insurance, PMI? Or is the assumption that there will always be some provider that will insure you?

If being insured is in the terms of your mortgage, and you don't find insurance, you would be in technical default and, depending on the terms of the mortgage, they could call the entire amount due and payable.

You'd then have to either:

a) find insurance pronto,
b) refinance with a lender who didn't care as much (or had their own insurer),
c) search the cushions for loose change and pay off the mortgage then and there, or
d) deal with foreclosure, if the note-holder chose to take it to the limit.

quote:

Originally posted by Sig2340:

quote:

Originally posted by chellim1:
I heard just yesterday that 12% of people across the country have no homeowners insurance, including a large number who have just recently decided to drop it because of all of these rate increases. These people are now "self insured" ie. uninsured.

12% of people don’t have a mortgage?

My mortgage company makes clear the property is insured all the time or they call in the note.

Guy I work with has no insurance of any kind on his home in Florida. He lives on the intracoastal. A beautiful little home currently worth $2.5 million. He paid off his home many years ago and then canceled everything. The price of insurance there is insane, and he just had enough of it.

quote:

Originally posted by joel9507:

quote:

Originally posted by konata88:
But if there are no providers willing to ensure you, then I would guess that lenders will want to cover their loans (which in a sense is what the home insurance does). So, in the absence of insurance, PMI? Or is the assumption that there will always be some provider that will insure you?

If being insured is in the terms of your mortgage, and you don't find insurance, you would be in technical default and, depending on the terms of the mortgage, they could call the entire amount due and payable.

You'd then have to either:

a) find insurance pronto,
b) refinance with a lender who didn't care as much (or had their own insurer),
c) search the cushions for loose change and pay off the mortgage then and there, or
d) deal with foreclosure, if the note-holder chose to take it to the limit.

Mortgages won't cancel the loan or call it due, they have access to substandard carriers
and they place your home in coverage for you and bill you for the insurance, if you think
standard coverage is expensive, wait until you are placed in their substandard carrier risk program.

Other option will be state insurance, CA has a State Insurance program, as does Florida and many other states, you can buy coverage there, it's generally not as good as buying on the market and the rates are rarely competitive. Basically you go into a shared risk pool run by the state if you can't find coverage elsewhere.

State Farm isn't pulling out, yet. However they are asking that the consumer protection rules on maximum rate increases dropped and be allowed to adjust rates to reflect the market risks they see in CA or any other state for that matter.

We have that same problem here in Florida, my Sis in Law had to find a new carrier when Farmers decided to drop her coverage, 15 years, zero claims, low risk, in the middle of the state, where Hurricane damage is low risk.

Tells me their Reinsurance company is putting big pressure on them and will exponentially raise their rates (if they haven’t already) to them unless they clean the books up

I have had some mortgage clients decide to go with the forced place insurance the bank obtains to satisfy the loan. This is coverage to cover the loan balance and no liability. Flood insurance is a separate issue. I’ve had clients tell me the forced place insurance is cheaper than anything they can obtain traditional insurance. This is mostly SF Bay Area. High fire danger areas. Cost of construction all in on high cost areas can be 250-1000 a foot hard costs and soft costs and quality of finishes.

If you have no mortgage you can go naked just save cash and self insure for any disaster but if there’s a mortgage your hosed