not defending it, but the logic is this:
the mortgage is for the land and the home, so with no coverage, a bank won't extend a traditional mortgage on an asset that isn't insured at least at assessed value. if insurance lapses during repayment, they force the cheapest on the buyer in case of disaster. the whole idea of a 30 year loan is that if you walk away, the bank gets the house to sell. they aren't going to voluntarily expose themselves to that level of risk over decades without some asset they can seize and sell.
and it is not much more per month (than assessed value) to insure a home at replacement value, in my experience. but if you somehow got your house deleted, you would still own the lot its on. which is obviously less without a residence on it, but if you're in a very desirable area to rich people, it can be significant. obviously, that would all go to cover the loan when sold anyway assuming the owed amount is greater than the lot sale value.
the people who are most screwed are the working class renters who lost all their shit and have shit/no coverage. renters insurance is pretty cheap for what it can do in disasters, but without it you just lose everything and have nowhere to go with no hope of a check in the mail.
next, the people losing the most equity are those who have paid off their homes and let their insurance lapse (James Woods). while his was cancelled by an insurer--because climate change--most states have other insurers including an insurer of last resort... because if big swaths of homes can't be insured, the property market collapses... which the state has reasons not to allow. not to mention, they can't just cancel your policy without any notice. so that bozo got notice, did nothing about it, and let it be lapsed for 4 months after the notice ran out. if you have the cash, you don't let insurance on big assets lapse. that seems like something they teach rich people in the womb and for certain drill into the heads of financial advisors, which anyone who ever has millions should hire to help them not sit on their own balls. James Woods: portrait of a risk management genius. God damn I love that story about him losing big.
anyway, you can't sell an uninsurable home unless the buyer is paying cash, because a bank won't issue a loan for it. its a tiny minority of people who can do that. so that troubles any notion of what property value is, because home value is a function of what a bank will value it to issue a loan to to buy it.
climate change is fucking with the calculus of all this, and exposing the contradictions in having local government services and revenues tied to local property value. it is a knot that won't be unwound without confronting some assumptions baked into our political economy, and under capitalism, the knot is holding a noose around our necks.
anyway, don't live in socal. or Texas. or Florida, but especially on the coast. other places too. and if you suspect my criteria, you can also independently look up articles about which insurance companies are pulling out of which states/areas and make your decisions that way. its all public information. my boomers parents could live anywhere, but they choose a place that will not be making it. I send them those articles every time an insurance company cancels policies and leaves their area for good.
for profit insurance is a house-always-wins scam, so the more customers they can sign, the more they make. they want a full casino. you can rest assured, if they are not taking money from people in a place, it's because the odds are against them in that place.
GOOD post
I would like to know more about how big of a loss James "genocide enthusiast" Woods just took
for real I haven't looked up Jack shit about the specifics (yet, lol) but PVA is probably public, and that doesn't even include all the shit inside or custom home build shit a douche like that would have.
my wild guess is he's down $10 - 20 million. rich assholes like that live and breathe on lines of credit and with how hard he has been running his mouth to be a massive right wing crank pariah on social media for a decade, I don't imagine too many of his old acting cohort are leaping to settle his tab at spagos or Nobu or the country club or whatever clothier makes his linen blazers.
I think I might spend some time this weekend putting together a firmer estimate on how hard he screwed himself, just for the love of the game.
It's BS but the same thing happens if your car gets totaled while you're still paying for it. If your insurance can't cover the rest of your loan, you gotta pay it off. Sometimes you can buy a second insurance plan - gap coverage - which as the name suggests is supposed to cover the gap between your accident coverage and your outstanding loan amount.
In the case of a mortgage I think declaring bankruptcy might be the most rational move. The bank will take the land but the debt will be discharged, and with time you can rebuild your credit and get another one. It's a better out than defaulting and losing the land that way in any event. If you own the land outright then you can take out a new mortgage to rebuild, but damn that sucks especially if you spent thirty years repaying the original one.
Amerikkkan social credit system so disgusting that they won't let you buy a house after you lose the first one in a natural disaster caused by the state.
A lot of lucky petit bourgeoisie (who aren't mega rich but comfortable until now) are going to find out how everyone else lives...
This shit sucks for everyone.
The correct answer is "no lol just don't pay that shit"
I feel like if you're homeless and everything you own is incinerated you have bigger concerns than your creditarinos
yeah, you'll never get a mortgage again but what are you supposed to do, live in rent while paying mortgage on a fucking pile of rubble
The reality is you won't be renting either if your credit is fucked.
What we just witnessed is another explosion of homelessness.
We're all gonna be living in flea ridden for profit barracks paid for with FEMA vouchers it's gonna be sick, I've always wanted to experience the lifestyle of a Spanish bracero in 1820
All opinions herein expressed are those of a mentally ill middle aged communist crank
These fires have left me kind of anxious, not over the possibility of losing my belongings or even the home that my partner and I have managed to buy together. I'm terrified of losing our future. It's so clear now how fragile it all is. One disaster could ruin any hope we have of keeping a home and saving money for retirement one day. And this is happening right now to thousands of people. Historically LA fires have mostly impacted wealthy neighborhoods, but this is something else. I know someone whose home burned down that they just bought a few months ago. They are completely fucked.
Edit: In case there's some confusion, I'm not talking about rich suburbs burning down. Yes, of course the mcmansions in the hills are going first. Those idiots insist on living in some of the most flammable regions on the planet and can afford to rebuild over and over. I'm not going to try to justify whether I deserve my home, but it's a single bedroom condo "worth" under half the median price in LA that I share with my partner. If it burns down, we'll be priced out of a home permanently while paying off a mortgage for a pile of ash for the next 20 years.
Living in climate change is playing Russian roulette and every year your odds get worse
Yup. My partner and I were able to buy a home when prices were low and we were able to save up money, but those circumstances don't seem likely to come around for us again. If our house was destroyed, we'd be thrust right back into perpetual renting.
One disaster could ruin any hope we have of keeping a home and saving money for retirement one day.
Whew thank God I'm never going to be rich enough to afford either. Genuinely kinda more worried about the hundreds of millions of people who are going to die from climate change, who the hell gives a shit whether the American middle class loses their hope or whatever.
I'm not so fucking sure I'm on the same team as middle-class americans, but sure.
Middle class is an arbitrary distinction we are all workers
Now what can definitely be said is that your typical American is a reactionary racist beyond salvation but that's true regardless of income, and if this is your point I don't disagree
Middle class is an arbitrary distinction we are all workers
It's not entirely arbitrary. The middle classes are what people are referring to when they talk about the Petit Bourgeoise & "Labor Aristocracy". Still, peppersky is perhaps taking things a bit too personally.
I'm not crying for some roaches with million dollar homes getting what was coming to them. The United States uses more power for air conditioning than all of south america uses for existing. Fuck em. Fuck their houses, fuck their retirements. They'll hold on to their white picket fences until the rest of the world has burned into nothing but ash. We can and will do without them. These wildfires, all the wildfires to come are nothing compared to what climate change will wrestle upon the rest of the world.
One way of thinking I guess... The other is that these people live in the imperial core and had these decisions largely thrust upon them. They're indoctrinated. It's a similar inclination to hating the descendants of Jews that the Nazis shipped to the burgeoning colony in Palestine in the lead up to the Holocaust. If we're completely abandoned the idea that these people are reachable and can organize and avert the worst outcomes, then sure. I'm not so certain they're unreachable though. A lot of them, even most of them, definitely are in my experience.
All true, but fuck them anyway. The 2022 pakistan floods destroyed 800.000 houses and killed 1700 people. That's where my sympathy goes, to the people who didn't profit from the ravenous extraction of natural resources and the destruction of our whole planets ecosystem for the last two centures, but who as always bear the brunt of the destructive forces behind capitalism. Why should my sympathy go to the american middle-class of all people, just because they've colonized the whole world and have made their gentrifying destroying way of life the default? The middle-class in america is in no way closer to me or more important than any other poor person in any other part of the world.
Dude, I'm a house owner. Do you think I don't even deserve this shitty 511 square foot house that has put me into the category of being house-poor? Do you think I deserve to have my house burned down. You're a fool who has bought into the concept of the middle class which is a class division useful for the bourgeoisie.
While I can empathize with losing everything in a fire, the only explanation I can come up with for your comment is that the homes and their contents aren't insured for their replacement value. The only two explanations I've got for that are that people aren't fiscally literate or insurance companies refused to insure for fire in that area.
Why are people "completely fucked"? Did they own houses that they couldn't afford to insure or that couldn't be insured?
https://www.cnbc.com/2024/02/05/what-homeowners-need-to-know-as-insurers-leave-high-risk-climate-areas.html
This happened in 2023. Some people who had fire insurance before were suddenly left with very limited options; some far out of their price range in a city that already has an incredible COL and competitive labor market. Where does financial literacy come into this at all? A lot of people stay in these areas because they are affordable and they have a good job for the area that they are complete with transportation infrastructure. You were correct on your second assumption though, they refused to insure new homes in certain areas past 2023.
People are going to become increasingly more fucked because this is the beginning of climate change. More and more will change. Not just here, but globally where far more people will straight up die because of it. It's just hitting in the core especially hard right now.
Also; losing your home and your belongings in a fire is a pretty fucked position to be in. Even with a decent savings it's a lot to plan for, expensive and insurance will try to fuck you any way they can. People are shooting insurance executives here.
I don't think I asked my question near as well as you answered it. Thank you for that.
To demonstrate understanding, it's the same thing as what's happened to many good people in Florida. They're not stupid. They knew what was going to happen. But, there was no way out of the situation, no practical alternative choices but to assume the risk.
Thanks again.
not really, the federal government can provide funds to rebuild. whether they should provide funds for oversized multi-millionaire homes in Malibu is another question, but they aren't the only ones affected. the obvious is to rebuild more densely packed areas and multi-family buildings. and the rebuilt homes can be made more fire/earthquake resistant.
i don't think Phoenix should be rebuilt if it burns down though or shit like this.
The Feds could help poor and middle class people. But, while I don't know much about California wildfires, I know that helping poor and middle class people is rarely the most profitable choice. Only pretending to help, the marketing, is profitable.
fed doesn't need money profits (eg. troubled asset relief program or paycheck protection program), that it doesn't help regular people is a political choice, U.S. is ran by the oligarchs and all.
fed doesn't need money profits... that it doesn't help regular people is a more political problem
I've little tolerance for such minimization and deflection of the consequences of unmitigated capitalism.
Homes are the only major asset most Americans have.
Even the assumption that you have to have insurance to not be financially ruined is ridiculous.
Insurers will try any possible means to deny insurance claims.
climate change makes insurance unprofitable for the corps. The only possible (long term) provider of funding in such a case is the Federal Government.
Yeah, insurance corps will be the first one to cut losses and go, "nah you don't have insurance anymore. Good luck!"
homes, a physical thing that is needed
stocks, a theoretical thing that isn't neededIt's more, their own immediate revenue streams, that the insurers are prioritizing. Why they are legally allowed to do this, however, is certainly a quandary though.
Twitter user discovers the very complicated economics concept of... loans. I would joke "next time they'll learn how insurance works" but I have already seen a few twitter posts like that.
In America you have to pay for bankruptcy. I shit you not. The nasdaq has a handy guide for how to afford your bankruptcy.
Basically, not only does the application process require a fees (and lots of your time), getting an attorney will also cost you money. Money and time, which are famously things people fleeing from massive climate disasters have a lot of.
It would, but bankruptcy is quite a process (thanks, Brandon).
Also, your credit is wrecked for 7-10 years after a bankruptcy.
Source: close relatives went through bankruptcy, and I had to shepherd them through parts of it, particularly the initial gathering of documentation
I remember having to take a picture with a newspaper in front of my house the day I bought it because it was in a "fire danger zone"
Not going to dox myself but the area it's in had an entire fucking city and a half, and then miles of empty fields/airports/concrete jungle between it and the fires.
