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As in all the hurricane vs. tropical storm claims are out and its a straight up deductible? IDK,,,I thought I heard someone else saying something along those lines.
Right - they aren't charging hurricane deductibles for this. So it's just your regular ded. that applies. I thought you meant maybe the coverage changed because of the widespread nature of the disaster.
If Sandy was a Hurricane at landfall, insurance companies claim a 1 to 3% of the price of the home deductable. On a $400K home, the homeowner pays 4 to 12K before insurance kicks in. If it is not a hurricane, then your policy deductable (usually $500 to $1000) kicks in. Cumo's warning is benificial to all the homeowners who sustained wind damage from the storm.
However, homes damaged by outside water (floods) are not covered at all by homeowners insuranace. Instead, people by flood insurance from FEMA. However, that coverage is limited to $250,000 for buildings and a seperate coverage for $100,000 for personal property. Most homes in the LI area are valued more than $250K. So, you could still own the bank $400K on your waterfront home or near waterfront home, but only collect $250K from Fema. You still owe the bank the mortgage. This senario will be financially devastating for many, many people. This does not even include the scenarios where the insurance adjuster says it will cost $18K to fix something and you have 3 contractor bids for $25K and you only collect the $18K and still need to pay out $25K. Overall, this is going to be a long term nightmare for many, many people.
If Sandy was a Hurricane at landfall, insurance companies claim a 1 to 3% of the price of the home deductable. On a $400K home, the homeowner pays 4 to 12K before insurance kicks in. If it is not a hurricane, then your policy deductable (usually $500 to $1000) kicks in. Cumo's warning is benificial to all the homeowners who sustained wind damage from the storm.
However, homes damaged by outside water (floods) are not covered at all by homeowners insuranace. Instead, people by flood insurance from FEMA. However, that coverage is limited to $250,000 for buildings and a seperate coverage for $100,000 for personal property. Most homes in the LI area are valued more than $250K. So, you could still own the bank $400K on your waterfront home or near waterfront home, but only collect $250K from Fema. You still owe the bank the mortgage. This senario will be financially devastating for many, many people. This does not even include the scenarios where the insurance adjuster says it will cost $18K to fix something and you have 3 contractor bids for $25K and you only collect the $18K and still need to pay out $25K. Overall, this is going to be a long term nightmare for many, many people.
Using your example above - the $400K outstanding mortgage INCLUDES the land the home was on. Assuming the land was not lost in the storm - the $250K you mention would probably be enough get a 1,800-2,000 sq ft home built. Maybe not enough to make the insured whole - but not a total loss for the insured either.
Absolutely, Southbound3. A homeowner owes 400K to the bank, receives 250K from insurance, knocks the home down to the ground and sell sthe land for whatever the going rate is. They walk away even or with a little in your pocket. Bye-bye equity. Or you rebuild a small home. Of course, as the homes get more expensive, the harder it becomes to afford to rebuild.
Absolutely, Southbound3. A homeowner owes 400K to the bank, receives 250K from insurance, knocks the home down to the ground and sell sthe land for whatever the going rate is. They walk away even or with a little in your pocket. Bye-bye equity. Or you rebuild a small home. Of course, as the homes get more expensive, the harder it becomes to afford to rebuild.
I agree - and the loss of equity and/or the smaller home are the ultimate price extracted from the owner for deciding to live on/near the water - right?
Yes. Although, this lesson is "easier" for those that rebuild along the NC shoreline or other areas that seem to get wiped out every 5 to 10 years. That mess is certainly on them. LI hasn't had a large "water event" like this.....ever? Or at least in 30 years or so. So, the risk did not seem that large when they bought their homes. My heart still breaks for these families, but because many of them didn't live on the water, just near it. I think I FEMA has newer regs that say something to the effect that if we've paid on your property 2ce, we aren't doing it again. Not sure the exact regs though. I think that is a good thing. No reason for tax dollars to go to rebuild property that gets destroyed every 10 years.
Yep. We really should re think building in a flood zone. If there was no FEMA insurance the only people who could build on the beach would be people who had enough money to build again using their own resources. Not that I think we should dismantle FEMA, I don't. However, I do think that FEMA should cover a property address one time. After that, it's on the individual. And some individuals would take that risk and that is fine with me. Ok, that is just my two cents.
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