by Simon 30 Replies latest jw friends
The flood insurance is put into escrow, so it is factored into your monthly P&I. I'm not sure what happens once you pay off your mortgage. I assume you could drop the flood insurance. Not sure why you would want to though.
I wouldn't say the federal government was trying to lower premiums. I think it was more trying to protect the homeowner as well as the lender.
" I have no idea but can people in Tornado or Hurricane prone areas get insurance for those?"
If the tornado or hurricane has already hit, the usual answer is "NO". Not all insurance companies offer every kind of insurance. What insurance companies charge for similar coverage can vary, sometimes widely. It usually pays to shop for coverage.
"I have no idea but can people in Tornado or Hurricane prone areas get insurance for those?"
Flooding, as noted is usually building at an elevation or an area near to a body of water with the potential to rise significantly. What about these homes in the Western United States and other areas of the west that have built their homes in areas prone to have "natural" uncontrollable fire prone conditions.
In other industries the insurance companies wag the dog. In other words, if a costly trend begins, the insurance companies will usually make it so expensive to modify behavior, such as where people build their homes.
" The flood insurance is put into escrow, so it is factored into your monthly P&I. I'm not sure what happens once you pay off your mortgage. I assume you could drop the flood insurance. Not sure why you would want to though."
My experience was that once I had 20% equity in my house I was allowed by the bank to cancel my mortgage insurance, which as I understand it was in place to protect the bank in case I was abducted by aliens and stopped making my mortgage payment. The housing market drove up the value of my equity faster than my monthly payments did, and as soon as I hit that 20% mark I asked the bank to stop taking payments for mortgage insurance. They did; they are REQUIRED TO, but only if you ASK. Otherwise the bank will happily collect that "insurance" for the entire term of the mortgage, in my case 30 years.
But that was not flood or disaster insurance, it was only "mortgage insurance." As the purchaser of the property, it was up to me to decide how much protection I wanted to have.
At that time in my life I was happy to save the few extra bucks that the mortgage insurance cost; looking back I would have been wiser to apply even that small amount to paying down the principal of the loan, the house would have been paid for even earlier than it was (but I still did it in less than 30 years, saving thousands of dollars in interest by doing so.)
I think that in the USA at least, gov't finally realized they could not afford to keep giving handouts to people who lost their homes every year and refused to move off of the flood plain.
Yes, it seems that if the government reimburses people that they then get to choose to live in a olace of higher risk with insurance provided for free by taxpayers. Not ideal. The mandated insurance sounds like a fairer deal.
" In other industries the insurance companies wag the dog. In other words, if a costly trend begins, the insurance companies will usually make it so expensive to modify behavior, such as where people build their homes."
Sometimes people talk as though Insurance Companies were the big bad fat cat capitalists who were profiting from disasters.
If that is how a person feels about insurance, the advice I would give is "Fine; don't buy insurance."
Insurance is a business, and profit is the objective of a business. Anyone should know that they are free to start their own non-profit insurance charity if they wish.
Typical Insurance companies collect premiums from a lot of people knowing that the probability that they will have to pay everybody at the same time is low. The people who work for insurance companies get no pay. Wait, that was a joke! Of course everybody expects to get paid for their work and rightly so. Some of the premiums people pay pay salaries and other operating expenses, some money is paid to the investors who bankrolled the insurance company. Most of the money collected in premiuns is invested with the goal of growing that bankroll, because every insurance compny President knows that someday it is going to rain and the company's customers will have to be made whole to the limits of their policy.
The history of insurance is enlightening. A major player during the years of the worldwide British Empire was Lloyd's of London. See the movie (1936, Tyrone Power) here:
http://www.youtube.com/watch?feature=player_detailpage&v=pPrTrVe6XlU
Interesting thread. I was discussing insurance earlier this evening and my friend said insurance doesn't cover events deemed "acts of God", such as the floods caused by torrential rains, tornadoes, Tsunamis, etc. (I asked what if you're an atheist ;) ) Anyhoo, that was my understanding as well, but now NN says earthquake insurance exists, which surprises me as I didn't think you could get it when I lived on Van Island.
It would be awful to lose your home as some have in S. Alberta and know you aren't covered for anything, but I get Simon's point on this one. Complex biz.
According to our insurance agent flood insurance is almost a waste of money. It hardly covers anything. Totally ADD
People have such short memories. In 1915 Edmonton had a flood of its river valley and as a consequence, passed a by-law that residents in the river valley could only sell their property to the City, which would demolish the home and make the property part of our extensive valley park system.
Well, it's been few years, and that valley is ever more inviting and park-like. City hall was lobbied and now buildings are yet again being put up in the flood plain. People have developed a false sense of security, assuming such a flood could not happen again, now that we have a dam.
I rage every time I see a new luxurious condo development built in that valley.
" According to our insurance agent flood insurance is almost a waste of money. "
Everywhere? The stupidity of blanket statements is demonstrated by what your insurance agent said. Clearly for the people in Calgary and Edmonton, flood insurance may have been one of the wisest choices.
Where are you, TotallyADD? On top of Mount Ararat?
