Two Steps Back

One of the documents I need to apply for a line of credit on this house is the declaration page of the homeowners insurance. With this being the case I decided to take the opportunity to update it and get it in the correct name. That is proving harder than it should. What we’re doing is basically getting a new policy. That is the easiest and simplest way, but right now isn’t the easiest time to get homeowners insurance.

While regular people look at the flooding in Texas and see a tragedy due to the loss of human life. Insurance companies look at the flooding in Texas as a tragedy due to having to pay out on policies. Insurance companies don’t want to insure houses they might have to pay on. So with us being a mile from the ocean and in a house that has stood for nearly 50 years that makes it almost impossible to get insurance.

I am sure you’ve heard the saying insurance companies only insure houses that don’t burn. If anyone ever needs to use the service they can no longer insure anyone in a house that is even remotely similar. How else could the executive director of State Farm afford ten new yachts next year?

Think about the neighborhood I am in. This property is currently insured for close to $5,000. There are hundreds of houses in this neighborhood, and many cost a lot more than this one, but let’s say they’re all the same cost. That means that insurance companies are making close to $500,000 for every 100 houses like this, $5,000,000 for every thousand. You get the idea. There are hundreds of thousands of homes in this area struggling to get insurance because a company might have to pay out. They’d lose their passive income and have to provide the service they offer to provide.

Imagine taking your car to an auto mechanic and them telling you they only fix cars that don’t need any work. That is what insurance companies are doing. They are rejecting any policy that might need to be used. All so they can collect passive income on the millions of homes in this country, and aren’t impacted by the 10% of homeowners foolish enough to live in a house scheduled to be eradicated by a hurricane, house fire, or tornado this year.