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I would add second homes to that list as well. Why should the government pay to reimburse me for the loss of my vacation cottage or my winter snowbird home? Those are luxuries. Nobody NEEDS more than one house.
I also think we should be getting realistic about what global warming is going to do to southern Florida and to coastal areas all throughout the Gulf and the eastern seaboard, and start using buyouts to encourage people to relocate to safer locations. In the long run, that will be cheaper then trying to rebuild in a bad location over and over again.
I don't lump 2nd personal vacation homes in with the homes bought solely for investment purposes. Those 2nd homes can have a lot of personal items inside and could have been in the family for years. Maybe their flood insurance got jacked up so high that they could no longer afford to pay for it. Maybe their flood insurance got cancelled through no fault of their own.
I don't lump 2nd personal vacation homes in with the homes bought solely for investment purposes. Those 2nd homes can have a lot of personal items inside and could have been in the family for years.
Them move items of sentimental value to the primary residence, where they will be covered. Why should taxpayers pay to restore a second home. when many don’t even one a single house?
(And I am not just saying that about Florida. I apply the same logic to cabins in the woods, lake houses, desert retreats, etc. It’s one thing to offer government help on a primary residence, but I see no reason why a secondary residence should not be self insured. If you cannot afford to ensure for the loss, don’t own a vacation home!)
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Maybe their flood insurance got jacked up so high that they could no longer afford to pay for it. Maybe their flood insurance got cancelled through no fault of their own.
That is telling the owners something. If the government is not willing to issue flood insurance on a property, or insurance companies are not willing to issue homeowners insurance, that house is in a seriously bad location. It needs to be regarded as disposable. Enjoy it while you have it, but when it’s gone it is gone unless you can afford to rebuild it yourself.
Them move items of sentimental value to the primary residence, where they will be covered. Why should taxpayers pay to restore a second home. when many don’t even one a single house?
(And I am not just saying that about Florida. I apply the same logic to cabins in the woods, lake houses, desert retreats, etc. It’s one thing to offer government help on a primary residence, but I see no reason why a secondary residence should not be self insured. If you cannot afford to ensure for the loss, don’t own a vacation home!)
That is telling the owners something. If the government is not willing to issue flood insurance on a property, or insurance companies are not willing to issue homeowners insurance, that house is in a seriously bad location. It needs to be regarded as disposable. Enjoy it while you have it, but when it’s gone it is gone unless you can afford to rebuild it yourself.
Actually insurance scams where people were making fraudulent claims after storms jacked the insurance prices up. The private owners were penalized by the greed of others looking to make a quick buck.
2nd homes owned by private individuals tend to be a significant portion of those individuals wealth. They can't just afford to lose a house like that any more than the average person could afford to suddenly lose the balance in their 401K.
This business of "well some people can't even afford one home" doesn't hold water with me. Usually "some people" can't afford one home because they've opted to spend their money on something else or they never earned the money in the first place. I'm not big on penalizing those who chose to spend their own personal savings on a 2nd home.
Actually insurance scams where people were making fraudulent claims after storms jacked the insurance prices up. The private owners were penalized by the greed of others looking to make a quick buck.
2nd homes owned by private individuals tend to be a significant portion of those individuals wealth. They can't just afford to lose a house like that any more than the average person could afford to suddenly lose the balance in their 401K.
This business of "well some people can't even afford one home" doesn't hold water with me. Usually "some people" can't afford one home because they've opted to spend their money on something else or they never earned the money in the first place. I'm not big on penalizing those who chose to spend their own personal savings on a 2nd home.
I don't think anyone is trying to penalize someone for having a second home, but it's also not the tax payers job to pay for it when you fail to insure it properly.
Let me draw a comparison to Earthquake insurance in California. Earthquake insurance operates differently from other types of disaster insurance such as flood, fire, etc.
Let's say you have a house with a replacement cost to rebuild of $1 Million (just to pick a convenient number). With Earthquake insurance, your deductible is 10% -- $100,000 in this example. Unlike car insurance, you cannot select your Earthquake deductible, it is always 10%.
So if you fully insurance your home against Earthquake destruction (meaning purchasing $1 Million in Earthquake coverage in this example), you are on the hook for the first $100,000 of damage. But as a homeowner, you ask yourself, "If an earthquake hits, will my home be totally destroyed? Or will it merely suffer non-structural damage such as windows breaking and sheetrock cracks that can be repaired?"
If your house was built in the past decade or two, it has been built to modern Earthquake codes - designed to withstand a strong earthquake without failing, thus the likelihood of your house being a total loss is extremely small. But the likelihood of the house suffering repairable damage is still high. The house will "sway" in response to the shaking of the ground, but won't fall down.
People might want to purchase Earthquake insurance with a lower deductible - but cannot do so, as the deductible is not a dollar number but rather a percentage. As a consequence, people may decide not to purchase a full $1 Million of Earthquake coverage. They may only purchase, say, $100,000 of Earthquake coverage. That way, their deductible in the event of an Earthquake is only $10,000 for repairs. The insurance picks up the next $100,000 of damage. Beyond $100,000 - well, you're on your own again.
Many homeowners wish Earthquake insurance were structured so they could fully insure the property ($1 Million in my example) but with a modest deductible (say, $10K) - but that isn't the way it works.
Are people in Florida able to fully insure against floods? Can they choose their deductible? Or is it a mandated % as in my Earthquake insurance description?
I don't think anyone is trying to penalize someone for having a second home, but it's also not the tax payers job to pay for it when you fail to insure it properly.
You can't insure something properly if you can't get insurance for it or if the insurance that is available is way above your means.
You can't insure something properly if you can't get insurance for it or if the insurance that is available is way above your means.
You seem to be changing the topic. Why? The topic is people who voluntarily decide not to purchase flood insurance yet live in Florida (and other such places).
In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk.
Moreover, if the insurance is, as you say, "way above your means," does that not mean you cannot afford the house? Analogously, what if your property taxes are similarly "way above your means"?
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