About 40% of households don't have a mortgage. That number has been steadily increasing over time.
https://www.fastcompany.com/91139348/housing-market-economy-supported-by-record-number-mortgage-free-homeowners
It only makes sense if people are also not buying homes with mortgages. Which means more houses sold are in cash. The rich with large cash on hand and corporations. There is a shortage of affordable homes being built which drives people to rent, now there is a rental crisis that people can't afford rentals either.
No, it doesn’t ‘only’ make sense under these conditions. It can also be that a significant portion of homeowners purchased their first home long enough ago that they no longer have a mortgage (which totally makes sense).
Exactly, probably the driving force for why it’s so low. At some point it’s payed off, and even if the owners die they usually leave it for their children, who obviously won’t need a mortgage. I’d say there will always be more homeowners without a mortgage than those with one.
Fluctuation is normal. What isn't normal is a growing chasm. Population growth is exponential. You can leave your home to multiple kids. I mean you can but why? Can one of them not afford a home? That's a problem. So even while boomers are aging out of mortgages there should be people who pick them up, unless those boomers own enough houses to leave multiple homes to people. On top of that boomers are the largest fasting growing group of homeless. That's weird.
Individuals are not buying homes in cash. The growing gap of homeowners vs renters with a large % with no mortgage indicates people not affording homes or can't get a mortgage. Which prices are so high because there is a shortage. Rent prices are going up because so many people are being pushed to renting. This is a multi faceted issue but it does indicate an issue. Taken on its own more people not having a mortgage isn't a problem, it is a problem when other data is added. Because it's a symptom of the problem, not the problem itself.
Average mortgage only lives 7 years. Vast majority of mortgage loans never reach maturity either because of sale of the property (mortgage is paid at closing) or refinanced (which resets the terms).
Add in reverse mortgages, it's entirely plausible that much of the US housing invetory is consistently under a mortage.
I might be wrong but I believe after a certain percentage of the principal has been paid down (20%?), you can elect to remove the mandatory insurance, but then obviously if something happens, that's a pretty huge problem to have. Basically, I believe the banks require it to a certain point as part of your mortgage, but outside of that stipulation (ie: you don't have a mortgage or it's only required until a certain amount has been paid, etc.), you're free to not have insurance on your home.
I may be confusing this with something else though so someone feel free to correct me if I'm wrong.
edit tf is with the dramatic amount of downvotes? I literally highlighted twice that I was hoping for someone to clarify my understanding of what I thought OP might have been referring to?
You can get rid of PMI at 20% which is insurance for the bank against you as a risk in case you don't pay them. Insurance against risks to the house is required as long as you owe anything on the house. But 30-40% of homeowners don't have a mortgage, so they can opt out of homeowners insurance
gotcha - so PMI itself is insurance for the *bank*, not for the home itself, yea?
Is there something to what OP was thinking of that you don't really have a choice for opting to carry insurance? Because PMI was the only thing that came to mind for me.
Also, your lender WILL KNOW and flip their shit if the policy is canceled.
I honestly don't know how you'd do it though because mine is all handled via escrow.
In a standard mortgage, you have the option of having the bank maintain an escrow account and paying taxes/insurance or paying them yourself.
The bank prefers you to maintain an escrow account because they get to hold on to your cash and there's less risk of you falling behind on taxes or insurance.
Even with escrow, you still get to shop around and choose insurance that fits the minimum requirements. You could just call up and cancel your plan. They will find out and then they will take out their own insurance policy for you and charge you the premiums. If that happens they probably don't care that much about finding a good deal.
My policy is around $2k per year and just paid $20k for a new roof. I paid my deductible and an extra $800 out of pocket for hail resistant shingles and they knocked 12% off my next premium. Winning!
I can't imagine going without even if it's paid off. Exceptions being you live in a shack or are so rich you can reasonably self insure.
I suppose you could buy a policy that wouldn't cover that, but I know all sorts of people that got new roofs from the same hail storm, all covered by various insurers.
It certainly wasn't a young roof. The hail last year WAS a touch fortuitous.
This spring we had a much worse storm with hail and 90 mph winds and the new roof is completely fine. Well worth the money for a class 3 shingle.
Is this like healthcare where the same service is overcharged once they figure out insurance is paying for it? Or would it be $33k to fix a water leak, no matter who’s paying for it?
Probably, insurance companies are at the mercy of contractors, more or less. I had a tree come down on my house four years ago, which did a little damage. The adjuster came out and poked around, then offered me a payout of $15k to take care of it. He said if a contractor wound up wanting more than that to let him know, and they could adjust things accordingly.
To me the whole thing was ridiculous, but I wasn't going to argue with a guy writing me a check. I could have called a contractor or had things patched up one way or another, but I decided to replace the whole roof myself - for about $2,000, after watching a 15 minute how-to on youtube. It wasn't difficult.
My former insurance company didn't do shit after a derecho, and we ultimately spent $20K+ over a couple years getting damages fixed.
I have a mortgage so I'm stuck with insurance, even though so far insurance has been nothing but a pure money sink for us.
My understanding is you shouldn't use home insurance on anything but actual catastrophes like fires or natural disasters. Ive heard of people getting dropped by insurance companies for making claims on hail damage and such
My agent told me that it doesn't work like auto insurance when it comes to not making claims. It goes up so much every year and I've made one claim in 26 years.
Insurance on homes is based on the area, not your personal claims. If you don't make a claim but your neighbors do, your premium goes up. If you make a claim and they don't, your premiums go up. It's not penalizing you for a claim, it's going up because claims were made in your area -- by you or not. I learned this one when I paid out of pocket for repairs insurance would have covered because I didn't want it on my record. Two years later had more extensive damage and they could tell some stuff was newer so asked, and they explained that I wasted money because I was paying regardless since others in my area had claimed and that it would have made a minimal impact overall. Basically they said it's like (for ease of understanding)...
You have 10 people and 2 claim damage at $50 each, so $100 total. All 10 people now pay $10. The ones who got that $50 of repair are only paying 10 and the 8 that didn't are paying $10 more regardless. If one paid out of pocket at $50 instead of reporting, they would all pay $10 more (the $50 person would be paying $60) but if they had reported everyone would just pay $15, so that person wasted $45 by doing it on their own.
The same goes for those who "get one over" on insurance and get them to cover things they shouldn't... they didn't screw the insurance company, they screwed you and all your neighbors because you all pay for it with increased premiums.
I can usually fix a water leak for less than fifty bucks. If a water leak in your house can cause that much damage the house was built wrong.
edit: If a water leak in your house can cause that much damage the house was poorly designed. The water leak itself is the minor part of the cost.
I mean, something as simple as the water heater failing can cause a massive repair very quickly, especially once you consider other possessions etc. being water damaged. But go off, I guess?
My parents had a leak from work a plumber did. It leaked down to the kitchen and did $20k in damage. Luckily the plumber’s insurance paid for it. The leak was easy to fix, it was the damage it did that was expensive
Just got the renewal yesterday. The list of exclusions gets longer every year.
Once the house is paid off, I'll be looking for some kind of high deductible catastrophic plan that'll cover major damage from a fire or tornado and put the difference into a savings account to cover the other stuff
My homeowners insurance doubled, and I've never made a claim. It raised my mortgage almost $300 a month. I had to raise my deductible to $5000 just to get it low enough to make my house payment. For the record, if anything happens, I don't have $5000 laying around. They are pillaging us and give no fucks.
Yeah, when we owned a house we had home owner's insurance, but we never filed a claim. It was just too expensive to file any claims, so my wife and I just repaired everything ourselves. It helped that we are both very handy, and we managed to replace our water pump, partially re-roof our house, and replace almost all of the water lines in our house so we could upgrade from the original crap lines they had to pex. If neither of us were handy, I don't know what we would do.
I don't know if you've had any work done on your home lately, but in many regions of the country, the cost has doubled from what it was five years ago. Materials are expensive, and contractors are busy with new construction. I felt like half the contractors I called were just trying to figure out how many houses I flip per year and then they didn't show up for an estimate when they realize I actually live in my house. Plus, some regions have significantly increased risk of fire or flooding due to climate change.
You have to change insurance providers regularly. They give deals to new customers. I rotate almost every year and it keeps it way lower. Takes all of 30 min to do.
An insurance company that can't easily be reached wouldn't be worth paying for to me. When I've switched I just get the the new policy in place and call the old company to tell them the date of the new one. I've never dealt with a company I couldn't get on the phone or open a claim online.
A big part of the insurance issue in Florida (other than the catastrophic storms) are the massive number of claims made by plaintiff's lawyers against insurance company.
Mine didn't double but my monthly insurance + escrow is now higher than my monthly interest payment. It's actually even higher than my monthly principle.
What about people who could afford the home when it was purchased and life happened to them years later. I used to have no issues paying my $3k mortgage and had my $5k deductible sitting in an account. I had high deductibles on everything since I was willing to take on that risk at the time. A job loss and a major medical issue changed everything in my life. I guess I could’ve just let meningitis kill my son then I wouldn’t be in this situation. The rate increases didn’t stop just because my situation changed. I wasn’t going to walk away from my home simply because of that. It was my fucking home and we fight to make things better but when the deck is stacked against you, it’s a struggle. Saying just go rent is incredibly disingenuous and not realistic for many people. My rural town at the time simply didn’t have the rental inventory and none of them would have accepted pets. Maybe, just maybe, everyone’s situation is different.
also if you cant afford your house, you cant afford your house, so yes go rent its not disingenuous, its not mean, its not me making these rules, its just reality's of life
there is A: I can afford to pay my insurance deductible, or unexpected expenses. B: there is i cannot afford my minimum expenses: its black and white and if your in the B, I cant afford it that's just life you probably should not own a home. im sorry that's reality
i understand you cannot see the future but the bank did you a disservice the purpose of a stress test when you get a mortgage is to make sure your income can cover if rates go up.
Banks will give you most things you ask for because well they make money off you making bad decisions,
I totally understand there is not a ton of financial literacy being taught and it seems the tides are changing but all and all it is your job to look at rates and say if they go up to 8% 13% can i still afford this house. because they bank wont not approve you because if you fail they get to ding you and make more money
I understand but renting = things get fixed, owning = you fix it yourself. if you dont have money to fix it then your screwed
you should not buy a home unless you are financially prepared to do so or you will go into the home then show up to these subreddits saying AAAAAA THINGS ARE TO EXPENSIVE MY CREDIT CARDS ARE MAXED OUT WHAT DO I DO.
like we see on every other post
If the rents have almost doubled, as they did in my area, over the past five years while the median wage has only grown slightly, where does the issue lie?
it's actually great advice. if you have ever been a homeowner you know the importance of having an emergency fund for bad things to happen to your house and things in it.
ok? i don't think i or the world cares with what "you'd rather" do.
if you don't want to accept it, it's up to you, your life has no impact on mine. but if you can't set aside money to pay for emergencies that happen to your house then you really shouldn't own a house.
also -- renting is not "throwing away" money. thats the kind of mindset that fucks people up.
Renting is absolutely throwing money away in comparison to home ownership and Reddit seriously overestimates the frequency that you’re going to experience an “emergency” with your home.
i think people are downvoting you because they're just mad. but i see what you said as the truth. homeownership is expensive as fuck. it's a hard pill to swallow but just because you can pay for monthly mortgage doesn't mean you can afford a house. every homeowner, without exception, needs to have liquid money set aside for a rainy day.
im being down voted for speaking reality ?
so people down voting me, what happens when your HVAC goes out mid winter ? that's a 9000$ bill for a new one and your insurance will not cover it ?
so what happens you take out loans and go further in the hole ?
No reality is you can not afford to own that house so tell me how im wrong please ?
Your Feelings on this does not matter, the reality of it is your not in a homeowners position
If someone purchased a home a few years ago or more, their mortgage is likely less than rent would be. Perhaps they were in a different position financially when they purchased the home (illness, unemployment, divorce, etc) and now can't afford to leave.
> Rent is the maximum you pay every month. Your mortgage payment is the minimum you pay every month.
Until your landlord raises the rent. Rents jumped 30.4% in the US between 2019 and 2023.
https://www.cbsnews.com/news/rent-cost-us-2024-housing-national/
Reddit once again figuring out shit is just really fucking hard in most markets lol. We are really getting fucked at both ends.
That said, yeah owning a house means paying for a lot more than a house. Shit is rough, especially if you can't do it yourself.
My mortgage from 2015 is $450. You can't rent a room for that now... a lot of people have pre-pandemic mortgages. I can go 9k in debt and pay that off much easier than trying to rent at today's prices.
We had a major flood that caused hundreds of thousands in damage. Insurance saved our ass. These people don’t realize insurance is better to have and not need, then need and not have.
Yeah I know. Florida is in really rough shape now. Insurance through the roof but chances of a severe weather event are also high, and getting higher.
I know people who want to sell their condo but they can't since prices are dropping.
Only in certain areas, my condo in S FL close to the beach is still up 95% from 5 years ago before everyone started coming down here and has only seen 1-3% fluctuations in price (both ways) since
I imagine condos are a bit different as (usually) the HOA or whatever body that manages the shared areas have their own insurance. In a condo you're not responsible for a lot of things.
The down side is a lot of HOA's defer maintenance and under insure to keep fees low and then residents see a sudden increase in HOA fees and a "special assessment" to cover the repairs they can no longer put off.
There's tons on the subject, but this is a serious problem in some places, like Florida, and if I were buying a condo I would crawl through the HOA insurance, funds, and maintenance records with a fine tooth comb before buying.
Not being responsible for certain things like maintenance and insurance can come back to bite.
Pretty sure that's the main cause of the collapse of that condo building in Florida a few years back- the condo association kept putting off needed repairs to avoid the expense.
And then there are the ones that get repaired before they collapse and the residents who get hit with sudden special assessments totaling tens of thousands each.
Right after the Chaplain Towers collapse, I was looking on Zillow at units for sale and those that had recently sold at the time of the collapse. I recall seeing a unit that sold 2 weeks prior to the collapse and it had in bold type in the listing “subject to special assessment”. It was a lovely condo from the photos but I was absolutely baffled at their failure to do due diligence. Anyone who read the inspection reports, or walked through the parking garage for that matter and observed the structure decay, would have run screaming away from that place.
I have the feeling the people living in the sister building next door didn't have any complaints about special assessment fees after that happened
Though I'm betting quite a few of them moved out ASAP, too
Yeah but the flip side to that is I still pay the HOA's insurance besides my own through the monthly HOA fees (which have risen 132% for me also in those same past 5 years - not including my own previously mentioned individual condo insurance + car insurance increases since too)
You also pay something on your condo insurance called loss assessment which will cover your amount of the HOA group insurance so technically you pay twice. That being said, condo insurance is super cheap.
Even non-high risk areas in FL are going high. I made sure be buy in a northern area with low risk, and the house itself high and away from flood areas, no trees either. My mortgage (tax and insurance included) almost doubled this year, and they are already talking a 12.4% increase next year with citizens (state insurance, wasn’t able to make it on that one yet so mine will probably be more than 12%). I am only even here for family and friends, idk how much longer I can stay in this state.
That has nothing to do with this discussion at hand. The scenario discussed has no home purchase occurring. There is also a large difference between not having insurance and being uninsurable.
> There is also a large difference between not having insurance and being uninsurable.
Yeah a large amount of money. Everything is insurable for a price.
If the old lady is going to sell her house because she can't afford insurance somebody needs to be able to buy it. Many old ladies in California are locked into their homes because insane insurance prices (see article) mean only the independently wealthy can get insurance and therefore a mortgage. Lenders require at least 3 times (mortgage + insurance + taxes).
Because it's by design.
These lazy poor people who only work 40 hours a week or more need to stop hoarding all the wealth and land from the rich people.
>as large swathes of the US become uninsurable due to climate change
...and we're competing with climate refugees from all over the world for habitable land and affordable shelter!
You are correct. I currently work in insurance and live in Florida, and there are so many companies that pulled out of Florida completely. Some won’t write anything near water. Some won’t write certain lines of business, such as property. Working in the insurance industry in Florida for the past few years has been a mess to say the least 🤣
Government insurance agencies will be forced to step in. Its already happening in Florida. I think Florida’s could even run into solvency problems at current funding. At the moment it’s state tax dollars to my knowledge, I just dread the day the federal government will have to step in to shore up these state insurance agencies after an especially bad storm. The rest of the country’s tax dollars going to subsidize the shortsightedness of real estate developers in high risk areas.
Owing to the fact that California and Florida are far from the only places that are impacted by climate change, it’s less about that and more to do with the state government’s business policies
The title should be. Why homeowners can’t afford increased home insurance. Not that they think the rising prices aren’t worth it. As soon as one major incident happens they’re fucked and may even lose the house of it’s a liability claim
We have to be able to save money somewhere. Wages can’t be stale while everything else rises without some safety nets being given up.
Also insurance is scamming their way out of covering claims. Check out all the potential flooding and how insurance has already dealt with it.
There's a lot of reasons why rates are going up. Besides inflation climate change is a big one and everyone pays the cost. I would never advise someone to go without home insurance if they could at all help it. It's not just about your actions and natural disaster. It's to protect you from other people and their actions too. Someone else who started a fire in their yard with a BBQ pit and it spreads or a guest falls on your property breaking a bone. Yeah other people should have insurance and yeah other people should be responsible but that's not the world we live in.
Sometimes the deductibles are more than the repairs... Might be better off to just save your money and have it to make your own choices about repairs when it's time.
We moved to Florida in 2020 and our policy was $2800 with a $5000 deductible. In 2023-2024 it was going to be $11,000. Our house is somewhere between $500,000 and $525,000 now but it covers $300,000 with a $5000 deductible. That doesn’t include flood because you have to buy that from FEMA. We aren’t in a flood zone so we don’t buy it. Our house is paid for. So, we dropped the homeowners insurance. I’m guessing the policy this year would be $14,000-$15,000. Neither of us have ever had a claim. My husband is 60 and I’m 58.
I couldn’t imagine not having insurance on something like my home. Shit, my dog and cat have health insurance, for Christ’s sake. I’d always rather be overinsured than underinsured. It sucks to pay for but if you can’t afford the insurance, you definitely cannot afford to replace it.
I had three roofs put on my house in five years in Wyoming thanks to hail storms. They were $15k each time. I have a pretty healthy income but can’t afford that.
There are a lot of rural homes that have been paid off for a generation or more that have family members living in them. Many times, the deed has not been updated since the last owner died. My guess is that these homes account for many of the uninsured homes.
Of course, this can happen anywhere, but it seems to happen more in rural America.
There is no income bracket to where home owners insurance isn't worth it
Only stupid people don't have it. You are either too poor to NOT have it or too rich to be stupid enough to take the risk.
Stupid is a bold word. Long term, the average person is going to pay more into insurance than the money they receive, which is obvious or the companies wouldn't make money.
While I do not think the risk is worth it, it will pay off for many people, and a couple people will have their lives financially ruined because they went without it.
Yes. You've explained what shared risk insurance is.
It's great not to pay for insurance until you're the one whose house burns down or whatever and you're left with nothing.
You’re right. It should be funded by general taxes. Funding via property taxes results in inequity in education. Though it does make it easier to fund schools based on the “cost of living” in the area.
Property taxes with a million exceptions can not fund schools. Property taxes that can not keep up with the endless mission creep will fail. Property taxes along with school district boundaries perpetuate scarcity of opportunity. Find a better way to fund schools.
I've got land in the wildland Urban interface which has higher threat of wildfire danger - I'm hesitant to build there because I know insurance will be almost impossible
Ummmm mfing where? I’m like I have the whole kit a caboodle in my house. I’d be danged if it all goes up in smoke because it’s expensive to keep insurance….. I wish.
I had a storm with really high winds last year knock a tree down in my backyard. Storms and high winds are 90% of the damage that happens around here. I had about $3000 in damage, but apparently I have a ‘wind deductible’, and that was like $4500. This year, it’s $6500. So if there’s a storm, it’s all on me the first $6500, which is almost not like having insurance. Don’t get me started on my flood insurance. I live in a flood zone that has never flooded in the 50 years since it’s been built, so I get FEMA insurance forced on me if I don’t carry it.
Homes are obscenely expensive. If you can afford to go without you’re checking the “I’m rich enough to not worry in life box.” While I’m paying off an AC system for the next 5 years.
Geee, I wonder why you pay in for years and years and you never ever ever receive anything, and if you do make a claim, they drop you. I wonder why no one would want more unnecessary bullshit to pay into.
Are you fucking serious? No shit no intelligent person is gonna buy something they can never benefit from.
I would drop insurance if I didn’t have a mortgage…. Home owners insurance costs thousands upon thousands every year and it doesn’t cover any regular home repairs.
It’s basically “flood, fire, and hail” insurance for the once in a lifetime event that one of these happens
My homeowners insurance is $1,500 a year …
It’d take some pretty impressive returns to make that annual investment cover the replacement cost of our home if I needed it
$1500 yearly compounding at [10.2% annually](https://www.fool.com/investing/2024/01/21/the-average-stock-market-return-over-last-10-years/) is 28K. 30 years gets you to 300K.
Yeah *if* you have to collect on that. If my risk is low I don't need the insurance and if there is any risk the insurance isn't available or stupid high. I am in year 22 and my bank account is better off for it. My only risk that I can't cover is a total loss from wildfire and it isn't covered or is well above 2K. The bargain is broken for people with sensible housing with near to no risk. I am better off self insuring.
1, That can take decades to have enough to do a rebuild, and doesnt include other things insurance pays for like temporary lodging etc
2, I'm assuming you're only considering property damage and not things like liability costs, which can enter into the millions due to litigation if that's what you end up needing insurance for
The people who are going without insurance are almost all low income people. I guarantee they don't have enough money to cover any significant expense.
Besides even if they did save the money that they aren't paying towards insurance (which I doubt) it would take years and years of doing that before it would be enough to cover a major repair.
> are almost all low income
Most maybe. I doubt almost all. Got some numbers?
>Besides even if they did save the money that they aren't paying towards insurance (which I doubt) it would take years and years of doing that before it would be enough to cover a major repair.
Not necessarily a bad thing. Years and years later they will likely be able to afford the repairs or sold the property and moved on.
Do 12% of homeowners not have a mortgage. Because my understanding was you don't really have a choice if you do have a mortgage
About 40% of households don't have a mortgage. That number has been steadily increasing over time. https://www.fastcompany.com/91139348/housing-market-economy-supported-by-record-number-mortgage-free-homeowners
I mean, that makes sense though doesn’t it? Mortgage isn’t forever
It only makes sense if people are also not buying homes with mortgages. Which means more houses sold are in cash. The rich with large cash on hand and corporations. There is a shortage of affordable homes being built which drives people to rent, now there is a rental crisis that people can't afford rentals either.
Or it means the average homeowner is getting older and less young people are getting mortgages so proportion of ownership going up
Why do you think younger are buying less? Cause the rich have bought all the homes and drove prices sky high
No, it doesn’t ‘only’ make sense under these conditions. It can also be that a significant portion of homeowners purchased their first home long enough ago that they no longer have a mortgage (which totally makes sense).
Exactly, probably the driving force for why it’s so low. At some point it’s payed off, and even if the owners die they usually leave it for their children, who obviously won’t need a mortgage. I’d say there will always be more homeowners without a mortgage than those with one.
Fluctuation is normal. What isn't normal is a growing chasm. Population growth is exponential. You can leave your home to multiple kids. I mean you can but why? Can one of them not afford a home? That's a problem. So even while boomers are aging out of mortgages there should be people who pick them up, unless those boomers own enough houses to leave multiple homes to people. On top of that boomers are the largest fasting growing group of homeless. That's weird. Individuals are not buying homes in cash. The growing gap of homeowners vs renters with a large % with no mortgage indicates people not affording homes or can't get a mortgage. Which prices are so high because there is a shortage. Rent prices are going up because so many people are being pushed to renting. This is a multi faceted issue but it does indicate an issue. Taken on its own more people not having a mortgage isn't a problem, it is a problem when other data is added. Because it's a symptom of the problem, not the problem itself.
Average mortgage only lives 7 years. Vast majority of mortgage loans never reach maturity either because of sale of the property (mortgage is paid at closing) or refinanced (which resets the terms). Add in reverse mortgages, it's entirely plausible that much of the US housing invetory is consistently under a mortage.
I might be wrong but I believe after a certain percentage of the principal has been paid down (20%?), you can elect to remove the mandatory insurance, but then obviously if something happens, that's a pretty huge problem to have. Basically, I believe the banks require it to a certain point as part of your mortgage, but outside of that stipulation (ie: you don't have a mortgage or it's only required until a certain amount has been paid, etc.), you're free to not have insurance on your home. I may be confusing this with something else though so someone feel free to correct me if I'm wrong. edit tf is with the dramatic amount of downvotes? I literally highlighted twice that I was hoping for someone to clarify my understanding of what I thought OP might have been referring to?
You can get rid of PMI at 20% which is insurance for the bank against you as a risk in case you don't pay them. Insurance against risks to the house is required as long as you owe anything on the house. But 30-40% of homeowners don't have a mortgage, so they can opt out of homeowners insurance
gotcha - so PMI itself is insurance for the *bank*, not for the home itself, yea? Is there something to what OP was thinking of that you don't really have a choice for opting to carry insurance? Because PMI was the only thing that came to mind for me.
OP is correct - it is usually a condition of your mortgage that you carry homeowners insurance. If your house is paid off you can do what you want.
Also, your lender WILL KNOW and flip their shit if the policy is canceled. I honestly don't know how you'd do it though because mine is all handled via escrow.
They'll just do forced insurance instead.
In a standard mortgage, you have the option of having the bank maintain an escrow account and paying taxes/insurance or paying them yourself. The bank prefers you to maintain an escrow account because they get to hold on to your cash and there's less risk of you falling behind on taxes or insurance. Even with escrow, you still get to shop around and choose insurance that fits the minimum requirements. You could just call up and cancel your plan. They will find out and then they will take out their own insurance policy for you and charge you the premiums. If that happens they probably don't care that much about finding a good deal.
makes sense, thanks for the assist
You are thinking of PMI, in the event you struggle with paying the mortgage.
It should also be noted that PMI does not benefit the homeowner in any way. It’s to make sure the lien holder gets paid if you default.
Thats PMI my dude.
You’re talking about PMI, which is different. PMI is paid if you put less than 20% down on your house.
My insurance company is paying $33k for a water leak. I can afford insurance but not that claim. It’s crazy to go without.
My policy is around $2k per year and just paid $20k for a new roof. I paid my deductible and an extra $800 out of pocket for hail resistant shingles and they knocked 12% off my next premium. Winning! I can't imagine going without even if it's paid off. Exceptions being you live in a shack or are so rich you can reasonably self insure.
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I suppose you could buy a policy that wouldn't cover that, but I know all sorts of people that got new roofs from the same hail storm, all covered by various insurers.
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It certainly wasn't a young roof. The hail last year WAS a touch fortuitous. This spring we had a much worse storm with hail and 90 mph winds and the new roof is completely fine. Well worth the money for a class 3 shingle.
Is this like healthcare where the same service is overcharged once they figure out insurance is paying for it? Or would it be $33k to fix a water leak, no matter who’s paying for it?
Probably, insurance companies are at the mercy of contractors, more or less. I had a tree come down on my house four years ago, which did a little damage. The adjuster came out and poked around, then offered me a payout of $15k to take care of it. He said if a contractor wound up wanting more than that to let him know, and they could adjust things accordingly. To me the whole thing was ridiculous, but I wasn't going to argue with a guy writing me a check. I could have called a contractor or had things patched up one way or another, but I decided to replace the whole roof myself - for about $2,000, after watching a 15 minute how-to on youtube. It wasn't difficult.
Tbh it's bad that's probably a realistic price. If it's inflated, it's not so inflated that you could easily absorb the cost.
My former insurance company didn't do shit after a derecho, and we ultimately spent $20K+ over a couple years getting damages fixed. I have a mortgage so I'm stuck with insurance, even though so far insurance has been nothing but a pure money sink for us.
My understanding is you shouldn't use home insurance on anything but actual catastrophes like fires or natural disasters. Ive heard of people getting dropped by insurance companies for making claims on hail damage and such
My agent told me that it doesn't work like auto insurance when it comes to not making claims. It goes up so much every year and I've made one claim in 26 years.
Insurance on homes is based on the area, not your personal claims. If you don't make a claim but your neighbors do, your premium goes up. If you make a claim and they don't, your premiums go up. It's not penalizing you for a claim, it's going up because claims were made in your area -- by you or not. I learned this one when I paid out of pocket for repairs insurance would have covered because I didn't want it on my record. Two years later had more extensive damage and they could tell some stuff was newer so asked, and they explained that I wasted money because I was paying regardless since others in my area had claimed and that it would have made a minimal impact overall. Basically they said it's like (for ease of understanding)... You have 10 people and 2 claim damage at $50 each, so $100 total. All 10 people now pay $10. The ones who got that $50 of repair are only paying 10 and the 8 that didn't are paying $10 more regardless. If one paid out of pocket at $50 instead of reporting, they would all pay $10 more (the $50 person would be paying $60) but if they had reported everyone would just pay $15, so that person wasted $45 by doing it on their own. The same goes for those who "get one over" on insurance and get them to cover things they shouldn't... they didn't screw the insurance company, they screwed you and all your neighbors because you all pay for it with increased premiums.
I figure we might get dropped, but it’s not until March of next year.
Nah, use it up, you can always switch carriers and your new piplicy will be lower if the old one replaced the roof.
Insurance is to pay for catastrophes
I can usually fix a water leak for less than fifty bucks. If a water leak in your house can cause that much damage the house was built wrong. edit: If a water leak in your house can cause that much damage the house was poorly designed. The water leak itself is the minor part of the cost.
I mean, something as simple as the water heater failing can cause a massive repair very quickly, especially once you consider other possessions etc. being water damaged. But go off, I guess?
Lmao what an asinine comment.
So you are yet another clueless homeowner? If people would stop accepting the junk developers build, insurance wouldn't be so expensive.
The guy isn’t talking about a leaky faucet obviously. Sometimes real leaks happen and it costs a fortune to fix.
The water line fix was easy. Hot water line steamed the crawlspace. Lots of mitigation and some repairs.
And none of that should have happened in the first place except the mitigation.
My parents had a leak from work a plumber did. It leaked down to the kitchen and did $20k in damage. Luckily the plumber’s insurance paid for it. The leak was easy to fix, it was the damage it did that was expensive
Yes that happened but it shouldn't. They way plumbing is run is often for convenience rather than building integrity.
Just got the renewal yesterday. The list of exclusions gets longer every year. Once the house is paid off, I'll be looking for some kind of high deductible catastrophic plan that'll cover major damage from a fire or tornado and put the difference into a savings account to cover the other stuff
My homeowners insurance doubled, and I've never made a claim. It raised my mortgage almost $300 a month. I had to raise my deductible to $5000 just to get it low enough to make my house payment. For the record, if anything happens, I don't have $5000 laying around. They are pillaging us and give no fucks.
Yeah, when we owned a house we had home owner's insurance, but we never filed a claim. It was just too expensive to file any claims, so my wife and I just repaired everything ourselves. It helped that we are both very handy, and we managed to replace our water pump, partially re-roof our house, and replace almost all of the water lines in our house so we could upgrade from the original crap lines they had to pex. If neither of us were handy, I don't know what we would do.
I don't know if you've had any work done on your home lately, but in many regions of the country, the cost has doubled from what it was five years ago. Materials are expensive, and contractors are busy with new construction. I felt like half the contractors I called were just trying to figure out how many houses I flip per year and then they didn't show up for an estimate when they realize I actually live in my house. Plus, some regions have significantly increased risk of fire or flooding due to climate change.
You have to change insurance providers regularly. They give deals to new customers. I rotate almost every year and it keeps it way lower. Takes all of 30 min to do.
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An insurance company that can't easily be reached wouldn't be worth paying for to me. When I've switched I just get the the new policy in place and call the old company to tell them the date of the new one. I've never dealt with a company I couldn't get on the phone or open a claim online.
I did switch companies. They all were basically the same. The only way I got the price down was increasing my deductible and shedding benefits.
Where? Florida I’m guessing
Corn Country, Ohio. Population approximately 2500.
A big part of the insurance issue in Florida (other than the catastrophic storms) are the massive number of claims made by plaintiff's lawyers against insurance company.
Mine didn't double but my monthly insurance + escrow is now higher than my monthly interest payment. It's actually even higher than my monthly principle.
That's awful.
if you own a home and don't have 5000$ incase something happens, you should not own a home and probably rent. your risk is very very high
"More than one in four Americans (28%) have savings below $1,000." https://www.forbes.com/advisor/banking/savings/average-american-savings/
And half don't own a home
What about people who could afford the home when it was purchased and life happened to them years later. I used to have no issues paying my $3k mortgage and had my $5k deductible sitting in an account. I had high deductibles on everything since I was willing to take on that risk at the time. A job loss and a major medical issue changed everything in my life. I guess I could’ve just let meningitis kill my son then I wouldn’t be in this situation. The rate increases didn’t stop just because my situation changed. I wasn’t going to walk away from my home simply because of that. It was my fucking home and we fight to make things better but when the deck is stacked against you, it’s a struggle. Saying just go rent is incredibly disingenuous and not realistic for many people. My rural town at the time simply didn’t have the rental inventory and none of them would have accepted pets. Maybe, just maybe, everyone’s situation is different.
also if you cant afford your house, you cant afford your house, so yes go rent its not disingenuous, its not mean, its not me making these rules, its just reality's of life there is A: I can afford to pay my insurance deductible, or unexpected expenses. B: there is i cannot afford my minimum expenses: its black and white and if your in the B, I cant afford it that's just life you probably should not own a home. im sorry that's reality
i understand you cannot see the future but the bank did you a disservice the purpose of a stress test when you get a mortgage is to make sure your income can cover if rates go up. Banks will give you most things you ask for because well they make money off you making bad decisions, I totally understand there is not a ton of financial literacy being taught and it seems the tides are changing but all and all it is your job to look at rates and say if they go up to 8% 13% can i still afford this house. because they bank wont not approve you because if you fail they get to ding you and make more money
No, if you can make it, you’ll own your home at the end of it. Renting will just keep you poor.
I understand but renting = things get fixed, owning = you fix it yourself. if you dont have money to fix it then your screwed you should not buy a home unless you are financially prepared to do so or you will go into the home then show up to these subreddits saying AAAAAA THINGS ARE TO EXPENSIVE MY CREDIT CARDS ARE MAXED OUT WHAT DO I DO. like we see on every other post
That’s because we live in a hyper capitalist hell. The line must go up forever.
Renting does not keep people poor. You can build wealth while renting.
In theory… the reality is rents are so high there is little to nothing left over to build anything with.
That's not a rent vs mortgage issue. That's an income issue.
If the rents have almost doubled, as they did in my area, over the past five years while the median wage has only grown slightly, where does the issue lie?
Median wage has nothing to do with you. What are YOU going to do to build wealth? Your top options are going to be to move or get a better paying job.
This is terrible advice
it's actually great advice. if you have ever been a homeowner you know the importance of having an emergency fund for bad things to happen to your house and things in it.
I also know the importance of not paying rent, I’d rather deal with an emergency when I get to it than endlessly throw away 1/3 of my income monthly
ok? i don't think i or the world cares with what "you'd rather" do. if you don't want to accept it, it's up to you, your life has no impact on mine. but if you can't set aside money to pay for emergencies that happen to your house then you really shouldn't own a house. also -- renting is not "throwing away" money. thats the kind of mindset that fucks people up.
Renting is absolutely throwing money away in comparison to home ownership and Reddit seriously overestimates the frequency that you’re going to experience an “emergency” with your home.
i think people are downvoting you because they're just mad. but i see what you said as the truth. homeownership is expensive as fuck. it's a hard pill to swallow but just because you can pay for monthly mortgage doesn't mean you can afford a house. every homeowner, without exception, needs to have liquid money set aside for a rainy day.
im being down voted for speaking reality ? so people down voting me, what happens when your HVAC goes out mid winter ? that's a 9000$ bill for a new one and your insurance will not cover it ? so what happens you take out loans and go further in the hole ? No reality is you can not afford to own that house so tell me how im wrong please ? Your Feelings on this does not matter, the reality of it is your not in a homeowners position
If someone purchased a home a few years ago or more, their mortgage is likely less than rent would be. Perhaps they were in a different position financially when they purchased the home (illness, unemployment, divorce, etc) and now can't afford to leave.
His point is home expenses don't end at a mortgage. Have you ever owned a home? If so you have to know large expenses come up.
Rent is the maximum you pay every month. Your mortgage payment is the minimum you pay every month.
I like that. I'm for home ownership, but I've seen unprepared people buy homes and completely wreck themselves financially and emotionally.
> Rent is the maximum you pay every month. Your mortgage payment is the minimum you pay every month. Until your landlord raises the rent. Rents jumped 30.4% in the US between 2019 and 2023. https://www.cbsnews.com/news/rent-cost-us-2024-housing-national/
Reddit once again figuring out shit is just really fucking hard in most markets lol. We are really getting fucked at both ends. That said, yeah owning a house means paying for a lot more than a house. Shit is rough, especially if you can't do it yourself.
My mortgage from 2015 is $450. You can't rent a room for that now... a lot of people have pre-pandemic mortgages. I can go 9k in debt and pay that off much easier than trying to rent at today's prices.
Yup lmao but yet you’re downvoted to oblivion because there’s no reasoning with some people.
Oh im feeling the Reddit Wrath, for just speaking very common sense lol
We had a major flood that caused hundreds of thousands in damage. Insurance saved our ass. These people don’t realize insurance is better to have and not need, then need and not have.
If you can't afford home insurance you definitely can't afford losing your home
People not being able to afford the basic necessities of life is intentional design in the US.
WORK HARDER SERF
Yup, it's all by design. They want to bring back the days when we didn't own land and barely survived.
Tell that to us in Florida lol
Yeah I know. Florida is in really rough shape now. Insurance through the roof but chances of a severe weather event are also high, and getting higher. I know people who want to sell their condo but they can't since prices are dropping.
Only in certain areas, my condo in S FL close to the beach is still up 95% from 5 years ago before everyone started coming down here and has only seen 1-3% fluctuations in price (both ways) since
I imagine condos are a bit different as (usually) the HOA or whatever body that manages the shared areas have their own insurance. In a condo you're not responsible for a lot of things.
The down side is a lot of HOA's defer maintenance and under insure to keep fees low and then residents see a sudden increase in HOA fees and a "special assessment" to cover the repairs they can no longer put off. There's tons on the subject, but this is a serious problem in some places, like Florida, and if I were buying a condo I would crawl through the HOA insurance, funds, and maintenance records with a fine tooth comb before buying. Not being responsible for certain things like maintenance and insurance can come back to bite.
Pretty sure that's the main cause of the collapse of that condo building in Florida a few years back- the condo association kept putting off needed repairs to avoid the expense.
And then there are the ones that get repaired before they collapse and the residents who get hit with sudden special assessments totaling tens of thousands each.
Right after the Chaplain Towers collapse, I was looking on Zillow at units for sale and those that had recently sold at the time of the collapse. I recall seeing a unit that sold 2 weeks prior to the collapse and it had in bold type in the listing “subject to special assessment”. It was a lovely condo from the photos but I was absolutely baffled at their failure to do due diligence. Anyone who read the inspection reports, or walked through the parking garage for that matter and observed the structure decay, would have run screaming away from that place.
I have the feeling the people living in the sister building next door didn't have any complaints about special assessment fees after that happened Though I'm betting quite a few of them moved out ASAP, too
Yeah but the flip side to that is I still pay the HOA's insurance besides my own through the monthly HOA fees (which have risen 132% for me also in those same past 5 years - not including my own previously mentioned individual condo insurance + car insurance increases since too)
Well there ya go. Lol. You're still paying it, just as a form of group insurance.
You also pay something on your condo insurance called loss assessment which will cover your amount of the HOA group insurance so technically you pay twice. That being said, condo insurance is super cheap.
Even non-high risk areas in FL are going high. I made sure be buy in a northern area with low risk, and the house itself high and away from flood areas, no trees either. My mortgage (tax and insurance included) almost doubled this year, and they are already talking a 12.4% increase next year with citizens (state insurance, wasn’t able to make it on that one yet so mine will probably be more than 12%). I am only even here for family and friends, idk how much longer I can stay in this state.
The oil companies made their money. Don’t worry about yours houses constantly being destroyed by flooding and once in a lifetime storms.
I know right. Luckily I havent bought a house yet. I am so damn glad I didn't pull the trigger a couple years ago on buying a house here.
I live in Michigan thankfully. We’re okay. Hurricane and fire zones look like hell to buy right now.
My Dad lives there. I lived there until I was 16. Might go back! Thought I hit the jackpot moving to FL in 2008 lol
2008 was not a great time
I was in 11th grade I really had no idea at the time. The financial crisis didn't affect me or my family cause we were already poor lol
I was a freshman in high school. Super poor. Had no idea what was happing.
And? Now what?
You either need to pay the insurance, or sell the house and downsize.
So an old lady living on social security who can no longer afford insurance should sell their home?
What's the alternative? Don't have insurance and pray nothing bad happens?
Sadly, yes, exactly that.
Well, there's millions of old ladies that don't own a home. Yes, she should sell the home or risk losing it all.
Who is going to buy an uninsurable house?
That has nothing to do with this discussion at hand. The scenario discussed has no home purchase occurring. There is also a large difference between not having insurance and being uninsurable.
> There is also a large difference between not having insurance and being uninsurable. Yeah a large amount of money. Everything is insurable for a price.
If the old lady is going to sell her house because she can't afford insurance somebody needs to be able to buy it. Many old ladies in California are locked into their homes because insane insurance prices (see article) mean only the independently wealthy can get insurance and therefore a mortgage. Lenders require at least 3 times (mortgage + insurance + taxes).
lol So just be homeless? I guess it trending these days.
Why would you lose your home ?
Because it gets destroyed or significantly damaged and you can't afford to fix it
Because it's by design. These lazy poor people who only work 40 hours a week or more need to stop hoarding all the wealth and land from the rich people.
God damn right brother
Going to grow rapidly as large swathes of the US become uninsurable due to climate change. Hello Florida!
Not to worry, Jeezis is coming back on a white stallion and is going to reverse climate change in the U.S. because he prefers Americans.
Good excuse for companies to overcharge
>as large swathes of the US become uninsurable due to climate change ...and we're competing with climate refugees from all over the world for habitable land and affordable shelter!
Does this mean insurance companies will go out of business? That's a metaphorical price I'm willing to pay
Not out of business, they just won’t offer coverage in certain areas. It’s already happening in California and maybe Florida?
You are correct. I currently work in insurance and live in Florida, and there are so many companies that pulled out of Florida completely. Some won’t write anything near water. Some won’t write certain lines of business, such as property. Working in the insurance industry in Florida for the past few years has been a mess to say the least 🤣
I mean, what happens when no one is insurable? It's not like the climate is going to stop changing or become more moderate
Government insurance agencies will be forced to step in. Its already happening in Florida. I think Florida’s could even run into solvency problems at current funding. At the moment it’s state tax dollars to my knowledge, I just dread the day the federal government will have to step in to shore up these state insurance agencies after an especially bad storm. The rest of the country’s tax dollars going to subsidize the shortsightedness of real estate developers in high risk areas.
Owing to the fact that California and Florida are far from the only places that are impacted by climate change, it’s less about that and more to do with the state government’s business policies
The title should be. Why homeowners can’t afford increased home insurance. Not that they think the rising prices aren’t worth it. As soon as one major incident happens they’re fucked and may even lose the house of it’s a liability claim
We have to be able to save money somewhere. Wages can’t be stale while everything else rises without some safety nets being given up. Also insurance is scamming their way out of covering claims. Check out all the potential flooding and how insurance has already dealt with it.
My home exploded last year from a start up meth house next door. Never going without insurance. It was a total loss.
There's a lot of reasons why rates are going up. Besides inflation climate change is a big one and everyone pays the cost. I would never advise someone to go without home insurance if they could at all help it. It's not just about your actions and natural disaster. It's to protect you from other people and their actions too. Someone else who started a fire in their yard with a BBQ pit and it spreads or a guest falls on your property breaking a bone. Yeah other people should have insurance and yeah other people should be responsible but that's not the world we live in.
Sometimes the deductibles are more than the repairs... Might be better off to just save your money and have it to make your own choices about repairs when it's time.
We moved to Florida in 2020 and our policy was $2800 with a $5000 deductible. In 2023-2024 it was going to be $11,000. Our house is somewhere between $500,000 and $525,000 now but it covers $300,000 with a $5000 deductible. That doesn’t include flood because you have to buy that from FEMA. We aren’t in a flood zone so we don’t buy it. Our house is paid for. So, we dropped the homeowners insurance. I’m guessing the policy this year would be $14,000-$15,000. Neither of us have ever had a claim. My husband is 60 and I’m 58.
That's because your great legislature allowed people to fraudulently claim roof repairs and ran out all of the home insurance companies.
I wish I could afford insurance, I'm constantly worried about something happening making me homeless.
That's a lot of risk.
I couldn’t imagine not having insurance on something like my home. Shit, my dog and cat have health insurance, for Christ’s sake. I’d always rather be overinsured than underinsured. It sucks to pay for but if you can’t afford the insurance, you definitely cannot afford to replace it. I had three roofs put on my house in five years in Wyoming thanks to hail storms. They were $15k each time. I have a pretty healthy income but can’t afford that.
That’s really dangerous in case of anything happens that could be really expensive
There are a lot of rural homes that have been paid off for a generation or more that have family members living in them. Many times, the deed has not been updated since the last owner died. My guess is that these homes account for many of the uninsured homes. Of course, this can happen anywhere, but it seems to happen more in rural America.
There homes must ge free and clear. If you have a mortgage you have to carry homeowners.
Wait... isn't it REQUIRED?
Only if your mortgage requires it. Otherwise, if you own the house free and clear, you are under no obligation to insure it.
I think this depends, because I own my house free and clear, but I’m required to have homeowners insurance because of my HOA.
There is no income bracket to where home owners insurance isn't worth it Only stupid people don't have it. You are either too poor to NOT have it or too rich to be stupid enough to take the risk.
Stupid is a bold word. Long term, the average person is going to pay more into insurance than the money they receive, which is obvious or the companies wouldn't make money. While I do not think the risk is worth it, it will pay off for many people, and a couple people will have their lives financially ruined because they went without it.
Yes. You've explained what shared risk insurance is. It's great not to pay for insurance until you're the one whose house burns down or whatever and you're left with nothing.
At any price?
Depends on a bunch of things but it can be cheaper to forgo the insurance and rebuild.
Not really.
I built my house. Yes I can.
Property taxes should include home insurance imo
property taxes should not fund schools
You’re right. It should be funded by general taxes. Funding via property taxes results in inequity in education. Though it does make it easier to fund schools based on the “cost of living” in the area.
bingo
Yes you’re correct. We should just all chip in. Housing would be cheaper. Maybe have an opp out for people who don’t have kids.
Property taxes with a million exceptions can not fund schools. Property taxes that can not keep up with the endless mission creep will fail. Property taxes along with school district boundaries perpetuate scarcity of opportunity. Find a better way to fund schools.
At the point the government can just rent the house to me.
They basically do.
I pay more in property taxes than I ever paid in rent and a sizable chunk of it goes to contractors that also sit on the school board.
They need to talk more about how many folks don't have renters insurance.
I've got land in the wildland Urban interface which has higher threat of wildfire danger - I'm hesitant to build there because I know insurance will be almost impossible
Ummmm mfing where? I’m like I have the whole kit a caboodle in my house. I’d be danged if it all goes up in smoke because it’s expensive to keep insurance….. I wish.
A reminder to shop around every year or try to bundle with other insurance
I had a storm with really high winds last year knock a tree down in my backyard. Storms and high winds are 90% of the damage that happens around here. I had about $3000 in damage, but apparently I have a ‘wind deductible’, and that was like $4500. This year, it’s $6500. So if there’s a storm, it’s all on me the first $6500, which is almost not like having insurance. Don’t get me started on my flood insurance. I live in a flood zone that has never flooded in the 50 years since it’s been built, so I get FEMA insurance forced on me if I don’t carry it.
Homes are obscenely expensive. If you can afford to go without you’re checking the “I’m rich enough to not worry in life box.” While I’m paying off an AC system for the next 5 years.
Geee, I wonder why you pay in for years and years and you never ever ever receive anything, and if you do make a claim, they drop you. I wonder why no one would want more unnecessary bullshit to pay into. Are you fucking serious? No shit no intelligent person is gonna buy something they can never benefit from.
Not worth it…..until their home burn to the ground.
All part of the movement to push normal people to rent forever. Back to feudalism we go!
I would drop insurance if I didn’t have a mortgage…. Home owners insurance costs thousands upon thousands every year and it doesn’t cover any regular home repairs. It’s basically “flood, fire, and hail” insurance for the once in a lifetime event that one of these happens
Are people seriously this dumb? If you can’t afford insurance don’t buy a home. This is crazy. And people wonder why they can’t escape poverty…
If you already have one and the insurance doubles for no reason to price you out, not really your fault.
I’ve heard of insurance premiums increasing but definitely not doubling.
In florida it has doubled for many people.
Very good point, I forgot about that situation. Very sad.
u hsa2 n florida
My homeowners is going up $308 this year. At this point the entire policy has doubled since I bought my house 5 years ago.
as long as you take what you would pay for insurance and save it, or safe bonds, high interest rate savings account, their not wrong....
My homeowners insurance is $1,500 a year … It’d take some pretty impressive returns to make that annual investment cover the replacement cost of our home if I needed it
$1500 yearly compounding at [10.2% annually](https://www.fool.com/investing/2024/01/21/the-average-stock-market-return-over-last-10-years/) is 28K. 30 years gets you to 300K.
For a house with a rebuild cost of over $450,000 in today’s dollars. Sounds like a great deal
Yeah *if* you have to collect on that. If my risk is low I don't need the insurance and if there is any risk the insurance isn't available or stupid high. I am in year 22 and my bank account is better off for it. My only risk that I can't cover is a total loss from wildfire and it isn't covered or is well above 2K. The bargain is broken for people with sensible housing with near to no risk. I am better off self insuring.
1, That can take decades to have enough to do a rebuild, and doesnt include other things insurance pays for like temporary lodging etc 2, I'm assuming you're only considering property damage and not things like liability costs, which can enter into the millions due to litigation if that's what you end up needing insurance for
The people who are going without insurance are almost all low income people. I guarantee they don't have enough money to cover any significant expense. Besides even if they did save the money that they aren't paying towards insurance (which I doubt) it would take years and years of doing that before it would be enough to cover a major repair.
> are almost all low income Most maybe. I doubt almost all. Got some numbers? >Besides even if they did save the money that they aren't paying towards insurance (which I doubt) it would take years and years of doing that before it would be enough to cover a major repair. Not necessarily a bad thing. Years and years later they will likely be able to afford the repairs or sold the property and moved on.
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About 2/3rd of the US lives in owner occupied housing. About 1/3 rents.