Bailout by fire?

[justdoitstewart]

LOL, I totally agree. I guess my thought was most people don’t think like that honestly. They don’t know how it works if their house burns down. I know some floppers that are in trouble and they really think that this could be a “good thing”. I’ve already talked to a few on the phone.

Maybe my title should be different? (Kind of like your title about real estate is not a hedge against inflation)…..j/k

[no_such_reality]

I don’t understand this line of reasoning.

Rich, people don’t understand their insurance. They don’t understand that they may not have replacement value. They don’t understand that they will only be paid for the house and not the land.

We see it everytime there is a disaster, people then discover when the insurance company starts to fight that they have exclusions and terms in their policies. We see it with people with cars, people are stunned when they smash their new car and find out after insurance ‘totals’ it that they still owe $5000.

People equate insurance with the insurance companies will replace it for me or give me the money I ‘paid’ for it, which is rarely the case.

[no_such_reality]

I don’t understand this line of reasoning.

Rich, people don’t understand their insurance. They don’t understand that they may not have replacement value. They don’t understand that they will only be paid for the house and not the land.

We see it everytime there is a disaster, people then discover when the insurance company starts to fight that they have exclusions and terms in their policies. We see it with people with cars, people are stunned when they smash their new car and find out after insurance ‘totals’ it that they still owe $5000.

People equate insurance with the insurance companies will replace it for me or give me the money I ‘paid’ for it, which is rarely the case.

[no_such_reality]

I don’t understand this line of reasoning.

Rich, people don’t understand their insurance. They don’t understand that they may not have replacement value. They don’t understand that they will only be paid for the house and not the land.

We see it everytime there is a disaster, people then discover when the insurance company starts to fight that they have exclusions and terms in their policies. We see it with people with cars, people are stunned when they smash their new car and find out after insurance ‘totals’ it that they still owe $5000.

People equate insurance with the insurance companies will replace it for me or give me the money I ‘paid’ for it, which is rarely the case.

[sandiego]

Exactly, Rich.

It seems as if you have spurred a bunch of ignorant posters with no sense of how things work in the real world.

FYI – it works the same with your car if it is stolen or destroyed. I love the stories of people who are upside down in a lease and joke that they are going to leave it at the border with the keys in it so it will get stolen and taken to Mexico. Insurance may pay the replacement cost of the car but if you owe more than the value of the car, you are on the hook for the difference.

[sandiego]

Exactly, Rich.

It seems as if you have spurred a bunch of ignorant posters with no sense of how things work in the real world.

FYI – it works the same with your car if it is stolen or destroyed. I love the stories of people who are upside down in a lease and joke that they are going to leave it at the border with the keys in it so it will get stolen and taken to Mexico. Insurance may pay the replacement cost of the car but if you owe more than the value of the car, you are on the hook for the difference.

[sandiego]

Exactly, Rich.

It seems as if you have spurred a bunch of ignorant posters with no sense of how things work in the real world.

FYI – it works the same with your car if it is stolen or destroyed. I love the stories of people who are upside down in a lease and joke that they are going to leave it at the border with the keys in it so it will get stolen and taken to Mexico. Insurance may pay the replacement cost of the car but if you owe more than the value of the car, you are on the hook for the difference.

[TemekuT]

Auto Lease – how many people decline the “gap” insurance…lots

[TemekuT]

Auto Lease – how many people decline the “gap” insurance…lots

[TemekuT]

Auto Lease – how many people decline the “gap” insurance…lots

[patientlywaiting]

If your house burns down, it’s much easier to claim hardship and walk away. Plus you get plenty of sympathy.

On the reconstruction side, does the insurance company pay the homeowner, or do they pay the contractors directly for the rebuilding work? Can someone who has rebuilt before clarify this situation.

If the insurance company gives someone $300,000 and says here, go rebuid, then it’s too easy to walk away with the money and let the bank foreclose on the land.

[patientlywaiting]

If your house burns down, it’s much easier to claim hardship and walk away. Plus you get plenty of sympathy.

On the reconstruction side, does the insurance company pay the homeowner, or do they pay the contractors directly for the rebuilding work? Can someone who has rebuilt before clarify this situation.

If the insurance company gives someone $300,000 and says here, go rebuid, then it’s too easy to walk away with the money and let the bank foreclose on the land.

[patientlywaiting]

If your house burns down, it’s much easier to claim hardship and walk away. Plus you get plenty of sympathy.

On the reconstruction side, does the insurance company pay the homeowner, or do they pay the contractors directly for the rebuilding work? Can someone who has rebuilt before clarify this situation.

If the insurance company gives someone $300,000 and says here, go rebuid, then it’s too easy to walk away with the money and let the bank foreclose on the land.

[(former)FormerSanDiegan]

Rich – Thanks for providing a dose of sanity. Any homeowner with insurance knows (or should know) whether their insured value is cash value or replacement cost. They also should know the dollar value of the strcuture(s) covered and the cost to replace them. They also know that in San Diego, often the cost of a property is primarily the land, with the structure often being less than 50% of the property value.

There seem to be a rash of ignorant posters who do not understand this. An FB who paid 700K or so might get less than 300K to replace their property. In the best case scenario, a homeowner has a replacement cost policy AND paid for enough coverage such that the replacement cost is no more than 150% of the value of their policy coverage. (Replacement value insurance typically covers up to 150% of the policy coverage).
It is highly unlikely that in the current market a charred empty lot would command the kind of prices paid for the improved lot with a structure on it.

Even in good economic times for housing, many in Scripps Ranch had to cough up significant funds to make themselves whole again after 2003.

A house burning down is not going to help an FB in San Diego.

However, it remains to be seen what the longer term effects of the follwing factors might be: lost housing stock, increased insurance costs, added construction jobs, and psychological effects on buyers.

Finally, my deepest sympathies go to those who have been displaced, lost their homes, apartments, and memories.

[(former)FormerSanDiegan]

Rich – Thanks for providing a dose of sanity. Any homeowner with insurance knows (or should know) whether their insured value is cash value or replacement cost. They also should know the dollar value of the strcuture(s) covered and the cost to replace them. They also know that in San Diego, often the cost of a property is primarily the land, with the structure often being less than 50% of the property value.

There seem to be a rash of ignorant posters who do not understand this. An FB who paid 700K or so might get less than 300K to replace their property. In the best case scenario, a homeowner has a replacement cost policy AND paid for enough coverage such that the replacement cost is no more than 150% of the value of their policy coverage. (Replacement value insurance typically covers up to 150% of the policy coverage).
It is highly unlikely that in the current market a charred empty lot would command the kind of prices paid for the improved lot with a structure on it.

Even in good economic times for housing, many in Scripps Ranch had to cough up significant funds to make themselves whole again after 2003.

A house burning down is not going to help an FB in San Diego.

However, it remains to be seen what the longer term effects of the follwing factors might be: lost housing stock, increased insurance costs, added construction jobs, and psychological effects on buyers.

Finally, my deepest sympathies go to those who have been displaced, lost their homes, apartments, and memories.

[Author]

Posts