Bailout by fire?

[(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.

[Rich Toscano]

Hi PW – The thing is, you don’t really have to claim hardship to walk away. You can just walk away. (You’ll get less sympathy, I will admit).

However, that’s a good point about taking the money and running. That’s a pretty huge loophole though, and maybe they have things in place to prevent it. Hopefully someone with some experience or knowledge in this area can chime in.

rich

[Rich Toscano]

Hi PW – The thing is, you don’t really have to claim hardship to walk away. You can just walk away. (You’ll get less sympathy, I will admit).

However, that’s a good point about taking the money and running. That’s a pretty huge loophole though, and maybe they have things in place to prevent it. Hopefully someone with some experience or knowledge in this area can chime in.

rich

[Rich Toscano]

Hi PW – The thing is, you don’t really have to claim hardship to walk away. You can just walk away. (You’ll get less sympathy, I will admit).

However, that’s a good point about taking the money and running. That’s a pretty huge loophole though, and maybe they have things in place to prevent it. Hopefully someone with some experience or knowledge in this area can chime in.

rich

[justdoitstewart]

Some of you are missing the point of the post; it wasn’t to dissect if the destroyed home would help or hurt the FB/flopper. It was supposed to be about the mentality of the FB/flopper in a desperate situation that might have a “way out” (in their mind) and also how it will affect the Diego economy/housing prices.

(Alot of the people that are in the mess of being a FB/flopper are the same people who have no clue how their insurance works.)

[justdoitstewart]

Some of you are missing the point of the post; it wasn’t to dissect if the destroyed home would help or hurt the FB/flopper. It was supposed to be about the mentality of the FB/flopper in a desperate situation that might have a “way out” (in their mind) and also how it will affect the Diego economy/housing prices.

(Alot of the people that are in the mess of being a FB/flopper are the same people who have no clue how their insurance works.)

[justdoitstewart]

Some of you are missing the point of the post; it wasn’t to dissect if the destroyed home would help or hurt the FB/flopper. It was supposed to be about the mentality of the FB/flopper in a desperate situation that might have a “way out” (in their mind) and also how it will affect the Diego economy/housing prices.

(Alot of the people that are in the mess of being a FB/flopper are the same people who have no clue how their insurance works.)

[sandiego]

The insurance company doesn’t care if you rebuild, the lender will.

Your loan docs will spell out who gets the proceeds from the insurance settlement.

If your house is paid off, you get a check for the amount to rebuild. You can do anything you want with it. The insurance company can’t make you rebuild.

[sandiego]

The insurance company doesn’t care if you rebuild, the lender will.

Your loan docs will spell out who gets the proceeds from the insurance settlement.

If your house is paid off, you get a check for the amount to rebuild. You can do anything you want with it. The insurance company can’t make you rebuild.

[sandiego]

The insurance company doesn’t care if you rebuild, the lender will.

Your loan docs will spell out who gets the proceeds from the insurance settlement.

If your house is paid off, you get a check for the amount to rebuild. You can do anything you want with it. The insurance company can’t make you rebuild.

[Rich Toscano]

Good point SD, the leinholder would surely be entitled to the insurance payout, it seems to me.

rich

[Rich Toscano]

Good point SD, the leinholder would surely be entitled to the insurance payout, it seems to me.

rich

[Rich Toscano]

Good point SD, the leinholder would surely be entitled to the insurance payout, it seems to me.

rich

[tothjj]

So if the appraised value is way higher than the actual value, could the lienholder take the money and just leave the property an empty burned out lot.

[tothjj]

So if the appraised value is way higher than the actual value, could the lienholder take the money and just leave the property an empty burned out lot.

[Author]

Posts