Flood Insurance

[tallyho8]

Depends on what you call "significantly". I don't like the idea of socialized anything, and that would amount to socialized insurance. Pay for the peril depending on the risk. Now if flood insurance isn't available where you live and you suffer a flood, that's a different issue, and has more to do with government interference than anything else.

You are incorrect about it being socialized insurance. Insurance companies charge more for the same policies in different communities depending on the risk. A community with a fully staffed fire department covering each square mile has lower fire insurance rates than a 20 square mile community with a volunteer fire department. If all peril insurance was mandatory on all homeowners policies, then communities at high risk of earthquakes would still pay more for the insurance than those in a low risk area and those with high risk of flood would still pay more than those living in areas of a low risk flooding.

If everyone paid the same price for insurance regardless of risk, this would be socialized insurance. But people at high risk would still pay more for insurance just like people who have records of accidents or DWI pay more for auto insurance.

If your home was covered with all peril insurance and something happened to it then the insurance company would have to pay off regardless of what caused the loss. At the present time much money is spent on attorneys by both the homeowner and the insurance company when a loss is questioned and suits are filed.

If all homeowner policies were all peril policies the rates would not be much higher because the insurance companys would operate on a broader base and we would not have our tax dollars being spent to compensate the many people who suffer losses from floods, earthquakes, etc. that their homeowners policies do not cover.

 

[Wombat125]

If all peril insurance was madatory on homeowners' policies as a federal mandate, then I think it would absolutely be socialized insurance.

Just because there may be geographical rate adjustments doesn't mean the feds wouldn't still be forcing you to buy a Coke with your cheeseburger.

Now if the private insurance companies did it on their own as a way to increase revenue and made it a competitive advantage, that's good capitalism. I just don't see that happening though.

 

[LMTC]

Tallyho, I see your point and acknowledge it; I was not considering that the all-peril rate could still be adjusted for any area depending on the various risks in that area. Point conceded, thanks for the clarification.

My concern is there would then still be subisidies, etc. because someone wanted to live somewhere beyond their means to insure, but that is not a response to your post...it's more a response to how our society has come to function in the last 50 years.

 

[tallyho8]

If all peril insurance was madatory on homeowners' policies as a federal mandate, then I think it would absolutely be socialized insurance. QUOTE]

Homeowners Insurance started out as fire insurance on your home and they added wind and hail insurance also to protect your home. Was the wind and hail insurance socialized insurance?

They added contents insurance to the policy. Was this socialized insurance?

Then they added liability insurance to protect your home from lawsuits. Was liability coverage socialized insurance?

They added medical coverage for visitors to your property. Was medical coverage socialized insurance?

Most homeowners policies have added many other coverages to the homeowners policy also such as theft and vandalism. Are these socialized insurance?

Why then would it be socialized insurance to add all perils to a homeowners policy?

Remember, if you have no mortgage on your home which requires certain types of insurance, you may pick only the coverages that you wish on your home and you do not need a homeowners policy or any policy at all.

I am merely stating that the reason people get a homeowners policy instead of just fire insurance is because they want to protect their home from any loss that may occur yet a typical homeowners policy has so many "ifs ands and buts" written into it, that if you loose your home to a peril, the company can say "sorry, you forgot to read the fine print. That loss is not covered". All perils would prevent this uncovered loss.

No one is asking to make insurance coverage mandatory on your home that you own free and clear of encumbrances though this would be highly recommended and would keep the taxpayers from having to pay for your home when a catastrophe occurs.

 

[tallyho8]

My concern is there would then still be subisidies, etc. because someone wanted to live somewhere beyond their means to insure, but that is not a response to your post...it's more a response to how our society has come to function in the last 50 years.

I agree with you completely on that statement. After Katrina I was amazed at the number of homeowners who had no insurance whatsoever and demanded relief from the taxpayers. I still know people who had their damages reimbursed by the government and have new homes with no insurance. I had one person tell me "Why should I waste my money on insurance like you are doing? If another hurricane washes my house away the government will buy me a new one."

 

[Champy]

Some folks here in Columbus who got flooded out were not even in Flood Plains and were not required or expected to have insurance. Now they're really being shafted by their insurance companies......

Also the latest in government "help" - folks who lived in 100yr flood plains; had insurance (or not); and experienced flood damage costing more than 40% of their home valuation; are now being told by local inspectors that in order to repair or rebuild their homes, they'll have to fill in the basements and raise the foundations 3'........or no building permits will be issued! These are whole neighborhoods of people in the middle of town who live 1/4 mile from a 20' wide creek... not someone who built out on the banks of a major river.

 

[LMTC]

Some folks here in Columbus who got flooded out were not even in Flood Plains and were not required or expected to have insurance. Now they're really being shafted by their insurance companies......

Also the latest in government "help" - folks who lived in 100yr flood plains; had insurance (or not); and experienced flood damage costing more than 40% of their home valuation; are now being told by local inspectors that in order to repair or rebuild their homes, they'll have to fill in the basements and raise the foundations 3'........or no building permits will be issued! These are whole neighborhoods of people in the middle of town who live 1/4 mile from a 20' wide creek... not someone who built out on the banks of a major river.

If flood insurance was available to them and they passed, then they should suffer the loss. If it was not available, different story. Our house is 200' in linear distance and 25' up in elevation from a creek that normally runs about 4' wide and a foot or less deep. I have seen it run 50' wide and 12' or so deep. It comes up very fast, goes down almost as quickly. I tried to purchase flood insurance, because I figure I am responsible for myself....it is not available in my location. Don't know why, we're nowhere near even a 500 year flood plain, but it's not.

 

[tallyho8]

Some folks here in Columbus who got flooded out were not even in Flood Plains and were not required or expected to have insurance. Now they're really being shafted by their insurance companies......

Also the latest in government "help" - folks who lived in 100yr flood plains; had insurance (or not); and experienced flood damage costing more than 40% of their home valuation; are now being told by local inspectors that in order to repair or rebuild their homes, they'll have to fill in the basements and raise the foundations 3'........or no building permits will be issued! These are whole neighborhoods of people in the middle of town who live 1/4 mile from a 20' wide creek... not someone who built out on the banks of a major river.

These are the same building requirements facing the citizens of New Orleans after Katrina and it just goes to show you that it can flood practically anywhere and how important it is for everyone to have flood insurance even if your mortgage company does not mandate it.

 

[Wombat125]

Homeowners Insurance started out as fire insurance on your home and they added wind and hail insurance also to protect your home. Was the wind and hail insurance socialized insurance?

They added contents insurance to the policy. Was this socialized insurance?

Then they added liability insurance to protect your home from lawsuits. Was liability coverage socialized insurance?

They added medical coverage for visitors to your property. Was medical coverage socialized insurance?

Most homeowners policies have added many other coverages to the homeowners policy also such as theft and vandalism. Are these socialized insurance?

I completely agree with you that none of these are socialized insurance. I'm not an insuranceologist, but it sounds like all of the examples sited above were initiated by either the homeowner or insurance company policy.

I'm not even saying that all-peril insurance is a bad idea.

I guess I got hung up when I read the word mandatory. Perhaps, in retrospect, I read too much into the original discussion, but my mind immediately went to government legislation to enforce said mandate. Lately I have kind of a short fuse when it comes to our legislators constantly trying to protect us from ourselves.

Why then would it be socialized insurance to add all perils to a homeowners policy?

Provided this is initiated by consumer demand and private insurance company policy, I'm completely on board.

Remember, if you have no mortgage on your home which requires certain types of insurance, you may pick only the coverages that you wish on your home and you do not need a homeowners policy or any policy at all.

I am merely stating that the reason people get a homeowners policy instead of just fire insurance is because they want to protect their home from any loss that may occur yet a typical homeowners policy has so many "ifs ands and buts" written into it, that if you loose your home to a peril, the company can say "sorry, you forgot to read the fine print. That loss is not covered". All perils would prevent this uncovered loss.

I would very much like to see an all-perils option for home insurance coverage. I will be the first to admit that I haven't read through the volumes of fine print in my own policy.

No one is asking to make insurance coverage mandatory on your home that you own free and clear of encumbrances though this would be highly recommended and would keep the taxpayers from having to pay for your home when a catastrophe occurs.

I agree here too. I always wear a helmet when on a motorcycle because in addition protecting my own melon, I potentially reduce the emotional and financial burden of those around me when I crash. But I would never consider voting for a mandatory helmet law.

The crux of my position still comes down to exactly who is doing the mandating for the all-perils insurance.

 

[Bird]

If flood insurance was available to them and they passed, then they should suffer the loss. If it was not available, different story. Our house is 200' in linear distance and 25' up in elevation from a creek that normally runs about 4' wide and a foot or less deep. I have seen it run 50' wide and 12' or so deep. It comes up very fast, goes down almost as quickly. I tried to purchase flood insurance, because I figure I am responsible for myself....it is not available in my location. Don't know why, we're nowhere near even a 500 year flood plain, but it's not.

If you go to Floodsmart.gov: Your premier resource for flood insurance information, you'll probably find the explanation. Flood insurance is only available if your "community"; i.e. city, county, etc. wishes to participate, so you have to contact your local elected officials if you want your community to participate. That website should explain what has to be done to join the National Flood Insurance Program (NFIP).