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Why do people who build or buy in areas that they know are going to

Well I kind of thought that one was obvious.;)
Hope you are doing well.
I'm great, but this state is totally fkkkkk. All football is off local channels due the storm now. This Flo chick is worse than Floyd and Matthew.
 
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Numbers for NFIP
On the oceanfront
$8k per year for max coverage of $250,000 and that is for flood only
We are on 14 ft stilts ( by requirement) with 2 nice size dunes in front of us
Have had the home 17 years and thankfully ( don’t know yet about this week) haven’t ever sniffed a claim
Also have wind and hail and fire policies that are private. My w/h went up 25% this year and again we have never filed a claim.
I am not complaining we are very fortunate but it doesn’t feel like we are being subsidized.
I assume you weren't on OIB in 99 when Floyd did a number on the east end of OIB and Oak Island/Long Beach when Floyd hit in 99. If it had been a Cat 3, things would look a a lot different there today. The problem/issue with barrier island development/insurance is that big events are relatively infrequent, but impacts can be astronomical. Also, NC's State-run coastal property insurance pool will be bailed out by all insurance policy holders statewide if wind damage exceed $2.9 billion...which it doesn't look like it will from Flo.
 
We do pay higher insurance. Much higher insurance.
Yes, the flood part of it is partially subsidized by the federal government, but people in flood zones are paying higher rates.
The NFIP is totally subsidized by all federal taxpayers. In fact, Congress erased $16 billion of the program’s debt last year. You know who ends up paying for that, right?
 
I don't understand this post at all.

1) If you don't live in a flood zone, the standard homeowners policy does not cover flood damage, so flood claims are impossible. That is the problem in Houston -- large percentage of the flood damage was not in flood zones and not covered by any insurance. Generally the only people covered in event of flood are people who are required to buy flood policies by their mortgage lender -- and that is houses that are located in flood zones.

2) To equate flood insurance to earthquake, tsunami etc is ridiculous. In fact the federal government does NOT pay to subsidize insurance in earthquake zones. We lived in Seattle, which is overdue for an 8 or 9 level earthquake that would absolutely level the residential parts of the city. Almost nobody's homeowner's policy will help when that happens. You can buy earthquake policies but they are extremely expensive and extremely limited coverage -- because they are not subsidized by the Uncle Sam. I just think it's weird that the government will subsidize insurance for luxury vacation properties in the path of hurricanes, but not for any other kind of risk.

3) Isn't it funny how wealthy people who rail about big government and "socialism," who would rather have people go bankrupt and die from medical conditions, who want to repeal Obamacare -- those very same people feel entitled to have the government subsidize their vacations? We call stuff socialism when it benefits somebody else. When it benefits us, we call it essential government services. Rich people are usually all for socialism as long as it's reverse socialism -- taxing the many to subsidize the few.
The origin of the NFIP is complex (a great source is https://www.nap.edu/read/21709/chapter/4#24), but it's original focus was to provide assistance to lower income individuals living along floodplains because that was typically the cheapest land to develop. Over time, politicians have politicized the NFIP (how about that, right?) and, today, it barely resembles the program it was intended to become.
 
Seems like a bargain because you know sweet FA about the subject.
I pay around $400 a year. Seem like a bargain? Well, considering the only thing that would flood my home would be a Category 5 hurricane, and a Category 5 hurricane has never hit the East Coast of Florida north of Ft Pierce....
Is paying $400 a year for something that is likely to never happen a bargain? When TS Faye rolled through here and dumped 27" of rain in 24 hours, my house was high and dry.
Now, my friends who do live in flood zones, or within the 1000 ft line from the coast....they are paying 5-10 times that. Most of them can't afford to carry it m
Your cherry picked number doesn't tell the story because there are a lot of people like me who can get it at a reasonable price but don't have to buy it....that keeps the average premium lower.
The people in flood zones are paying plenty for flood insurance.
It's called spreading the risk. Why do you have flood insurance if you weren't flooded by 27 inches of rain? The odds of that ever being duplicated or exceeded must be astronomical.
 
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Best beach house I've ever seen was down by Kill Devil Hills. All block, no windows, 2 steel doors and a flat steel roof. No porch, no nothing, sitting on a postage stamp piece of land for a cool 1.2 million beach front property. I thought, now that's my kind of ocean front property.
The market value of oceanfront properties like that are often significantly greater than the assessed value, which is what insurance is based on. Another thing to consider is that most of the value of coastal property is in the land, not the structure, and nobody insures land.
 
Well, I could type for hours on topics like the 1000 foot line, the actual statistics of hurricane strikes in Florida- where they hit and at what strength, Allstate Floridian and the shenanigans insurance companies play with the risk and payout numbers (the government of Florida complained about it).....
1. My actual risk of catastrophic damage is quite low.
2. I pay a higher premium than my actual risk would dictate. The reasons for this would take me a long time to explain.
3. Every time your insurance company goes in front of the state insurance board to ask for a rate hike, they have to show the numbers. The fact I pay a lot, but have no claims does keep your rates down.

Subsidized might be too strong a word, but I do help you.

isn't that the nature of insurance.? if you pay life insurance for 40 years but i pay for 3 years and then die did you subsidize my insurance
 
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The market value of oceanfront properties like that are often significantly greater than the assessed value, which is what insurance is based on. Another thing to consider is that most of the value of coastal property is in the land, not the structure, and nobody insures land.
great point. half the value of our property is the land. we often say let the storm take the house it is insured just don't take the dunes
 
I assume you weren't on OIB in 99 when Floyd did a number on the east end of OIB and Oak Island/Long Beach when Floyd hit in 99. If it had been a Cat 3, things would look a a lot different there today. The problem/issue with barrier island development/insurance is that big events are relatively infrequent, but impacts can be astronomical. Also, NC's State-run coastal property insurance pool will be bailed out by all insurance policy holders statewide if wind damage exceed $2.9 billion...which it doesn't look like it will from Flo.
we vacationed there in 99 but didn't build until 01. IMO the east end has never really recovered and still loses 1-2 houses each year. The pictures I fear this year will be awful.
 
It's called spreading the risk. Why do you have flood insurance if you weren't flooded by 27 inches of rain? The odds of that ever being duplicated or exceeded must be astronomical.
not so much- were do you think the ice caps are going to go when they have all melted?
 
The point of my post wasn't about market value. The land at the beach is usually the most expensive piece. The point was the type of house. One never has to travel to the beach to board up this type of home. It will rarely get damaged. It's a Guinness. Brilliant!
 
not so much- were do you think the ice caps are going to go when they have all melted?
It's not the melting ice caps that I'm actually worried about. It's the expanded volume of the existing water in the ocean that comes with higher overall temperatures that will get you.
 
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