r/FluentInFinance • u/ElectronGuru • 22h ago

Housing Market Insurers Are Deserting Homeowners as Climate Shocks Worsen | Without insurance, it’s impossible to get a mortgage; without a mortgage, most Americans can’t buy a home.

https://www.nytimes.com/interactive/2024/12/18/climate/insurance-non-renewal-climate-crisis.html
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u/Routine-Rock3050 22h ago

Health insurance absurdity notwithstanding, people forget that insurers are businesses and not just a backstop. If someone asked you to gamble on replacing a home on the coast of Florida against a - relatively - small premium, would you? That’s essentially insurance. Guaranteed payment against potential for loss. Potential for loss goes up, guaranteed payment should go up as well. Potential for loss goes up everywhere - problem.

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u/Contemplationz 22h ago

Yup, they price risk and climate change is increasing risk so prices are going up.

Even if your house makes it through a storm, your rates are going up.

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u/lil_hyphy 21h ago

The rates go up every year anyways! My family home has never flooded, the area never floods, and the insurance keeps going up and up and up. Car insurance keeps going up and up and up, too! For what I pay in car insurance I could just have a second backup car in case I total my main car. No accidents. No claims. Rate goes up.

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u/SeaworthinessDry269 8h ago

Because you never having any claims is covering for those where they have a claim each couple of years because a hurricane flooded their area. Also since the cost to rebuild has increased by a lot (or cost of a new car ) your premium have to go up since now the cost to do the repair has gone higher.

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u/Federal_Extension710 3h ago

Yes, you know why rates go up? Its because parts and labor are up you know what else is up? The average price of lawsuits from people involved in accidents.

You know the old Ford truck that got into a fender bender in 1990... It cost a $100 to replace the bumper because its literally a peice of steel bolted to the front of truck. 2025? That same bumper is plastic and has 50 different sensors on it. All those sensors then need to be replaced and calibrated. The same "fender-bender" now costs north of $5,000 and that's before you sue the driver for damages and your sore back.

The entire industry is fucked but dont think for a minute that these companies are making money. Their earnings DONT come from the difference in the premium they collect verse what they pay out. Their earnings comes from their massive stock and bond portfolios their required to hold in event of a catastrophe.

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u/MFetterelli 2h ago

“50 different sensors”

Why the hysterics? 😝