August 29 – In a recent report from the Wall Street Journal, a number of homeowners are opting to forego homeowner’s insurance because they just can’t afford the payments.
Apparently the likelihood of a disaster and the costs associated with it aren’t high enough to justify what they would have to pay monthly to be insured.
What does that say about the state of our country?
More importantly, wouldn’t the bank require the insurance for the purchase of the home?
Attorney Clint Barkdoll confirmed, “If there’s a loan on your house, you’re required to carry homeowners insurance as a condition of your loan. If you own your house free and clear, you’re technically not required to have insurance. We certainly would never recommend that approach. But the gist of that story and the timing is interesting as a big hurricane is approaching Florida today. Particularly in California and Florida, homeowner’s insurance rates are just going crazy. Remember, all of the big underwriters are pulling out of those states. That’s driving up costs even more.”
In Florida, apparently the average homeowner’s insurance is between $6,000 to $7,000 a year.
Barkdoll said, “So the article is pointing out there’s people that just can’t afford that. They cannot keep paying that kind of money, month after month. This is a real problem because a natural disaster comes through, it destroys the house. There’s no insurance on it. Well then what happens? Those people have basically lost everything with no coverage to replace it.”
And the $6,000 in Florida could be on the low end.
Barkdoll said, “Florida is the worst state in the country and as these underwriters keep pulling out of the market there and in California, those rates are even going to get hired. I know a retired couple in Florida, about a month ago they told me they are relocating to Georgia and one of the reasons they cited was these increasing homeowner’s insurance costs. They said they just can’t afford to keep doing it.”
Pat Ryan of NewsTalk 103.7FM pointed out, “Property in Georgia is awfully inexpensive and then the school taxes and all the rest of the things that go along with it, you find yourself in one of the smaller towns in Georgia, and life gets pretty good when it comes to your checkbook.”
