More Americans are bailing on home insurance

While lower-income homeowners blame high annual costs for ditching coverage, wealthier people say they have enough cash on hand to handle rebuilding, so there's no need to pay a monthly insurance fee. David Lazarus explains why that's bad thinking.
KTLA 5 News - Keeping Southern Californians informed since 1947.

[@rachelm2273]

What is the point when an insurance company can just refuse to pay?

[@shaggydawg5419]

insurance companies will go bankrupt if it isn't MANDATORY. That's the point. As for paying you when you need it... pffft... that's not part of the plan.

[@jofujino]

They can't just refuse to pay because (1) if your house is damaged the burden of proof falls upon the insurer to prove if it is not a covered event, and (2) because of the sums at stake there is just going to be a lawsuit if they give a fraudulent rejection. That said, most standard property insurance policies will not cover earthquakes, landslides, sinkholes, Flooding, Government action, Intentional loss, Neglect or wear and tear, Nuclear hazard, Water damage from sewer backups, Pest infestations, and War. You'd need a separate earthquake or flooding insurance policy. If you have a sinkhole problem and the sinkhole problem was known it is also common to sue the builder or seller of the home for having built on a sinkhole, or committing real estate fraud for selling a home with a known sinkhole problem without disclosing it.

[@Caliberx427]

Mortgage companies require you to have insurance. If you don't purchase it, they will purchase it for you, and add it to your bill. Usually, at a much higher rate.

[@GruneD]

Exactly

[@GrandHuevotes]

Yup

[@robertnewman4763]

True but around 1/3 of California Homeowners own their home free and clear

[@aldoogie824]

You could cancel after you get the loan

[@LCx829]

True but for about 10 years I was very under insured and didn’t even know it. Oops 😂

[@mrxxbrian]

Most insurance is a scam. Even if you pay monthly/annually they sometimes still don't even help you out in the end.

[@shaggydawg5419]

Insurance is a legalized scam. Period.

[@independentA]

100%

[@angel-ij4xv]

exactly well said

[@JasonBoyce]

insurance companies don't make money if they pay out

[@DanielRojas-nw3mv]

Health insurance,Car insurance,business insurance, and home insurance inflation is taking all my income 🧐🇺🇸

[@jillbelas7266]

The New America.

[@Jay-323]

Im sure you contributed to the cause

[@Irene94087]

It’s called. Insurance poor

[@DanielRojas-nw3mv]

@@Irene94087 True statement 🧐🇺🇸

[@mackereljones7854]

People are foregoing insurance because it’s basically a protection scam. Pay us or you lose your mortgage. You pay faithfully for decades, then they reneg when it’s their turn to honor the contract.

[@jeffreyscott5799]

If everybody cancels their insurance, the prices will drop

[@ThriftyCHNR]

No, the higher the paying population the more evenly loses can be spread. Thus if more people go uninsured it will cause prices to go up leading to a vicious cycle of people dropping and getting dropped and prices skyrocketing.

[@h7opolo]

@@Informer_119 but america is all about liberty, i.e. unregulated, laissez-faire capitalism in pursuit of profits.

[@johnmcgrew7128]

Who the hell can afford insurance?

[@bombaybeach208]

I dont blame them. Im a homeowner and just earthquake alone is $1700 a year.

[@lauriesica]

Home ownership is no longer an investment, it's a high stakes gamble and not the American dream. It's become a liability instead.

[@seriejohnson698]

I totally agree.

[@norcaljim8535]

We are getting hit in Northern California. 200,000 home is costing $2400 a year. They said it's because we live in the forest.

[@norcaljim8535]

$2400 insurance

[@lindakheshiboun1623]

You pay premiums for a lifetime. Make one roof claim and it get’s refused yet they won’t reinsure you without a new roof!😳

[@bigcahuna42366]

Even if you have your home paid off and are wealthy, aside from the climate possibly damaging or destroying your home, there's always a chance that your property can affect another person's safety or their property. If you don't have at least a personal liability insurance policy, you can risk getting sued.

[@l.a.raustadt518]

Insurance is expensive and people do not figure into their savings/income. That's bad planning! You are correct!

[@chaoticallysay2625]

When they won't cover anything anyways?!

[@beelikemizu604]

In Cali, people are getting mando dropped because these companies are overall losing money here & finding excuses to drop people, so they're helping everyone save money TBH

[@bngr_bngr]

Most banks require that a lender keep home insurance current. My house is worth $1.2 million. I pay $600 a year thru AAA.

[@Linescrew1Canada]

You don't really pay insurance for the dirt. It's the building and liability insurance that you're paying for.

[@bngr_bngr]

@@Linescrew1Canada my house wouldn’t be worth $1.2 million in Watts.

[@plusblood5101]

Not the rate any longer

[@bngr_bngr]

@@plusblood5101 I just renewed for that rate.

[@SunSandandSurf]

Really? Where do you live. This seems extra cheapo.:)

[@stephaniejames4940]

If you own your home and it's paid off you can take your chances. But if you are still making payments on your mortgage, you will end up with lender placed insurance (LPI) which can be double the amount. Lenders will send you a letter asking you to provide evidence of insurance whether it's escrowed or not. So only those who can pay to rebuild can afford not having coverage. This guy doesn't know what he's talking about. I work in the mortgage industry and no for certainty as long as making payments, insurance is required.

[@jeraldb2868]

Odd. When I bought my home a couple of years ago (my first), the lender ‘required’ proof of homeowners insurance. Thought that was true of all real estate transactions?

[@undefeatedaj]

Yes, your lender will require insurance if you have a mortgage. However, if the mortgage is paid off, there is no requirement to have insurance.

[@h7opolo]

@@undefeatedaj OP's ignorance alludes to the rarity of an unfinanced home.

[@zimmermaninsurance6299]

A home is not an investment unless it generates income. Your home is perhaps your biggest liability.

[@minimaxmiaandme.4971]

Ah, no!

[@bataremerson1970]

So what happens when your insurance won't cover the damage because it wasn't included in your basic insurance coverage?

[@kimberlybain9143]

My mortgage requires proof of insurance.

[@emc6511]

QUIET QUITTING is only a new name; not a new tactic. Mess with the employee enough so that they will just leave.

[@NortheastAndRetired]

Most of my friends living in Orlando recently got emails like that from their employers. 😮

[@bkanegson]

Fl state government has addressed the insurance crisis by making it legal for insurers not to pay out claims as written by claims adjusters, and disallowing shafted homeowners from suing. Problem solved! Thanks Ron!

[@higgs923]

As long as the rest of us are saddled with rebuilding Floprida every year the costs will go up.

[@davidcarp5935]

yeah, get used to cold ya wusses!

[@truthiscensored]

Reason why many are going to freelancing and/or gig apps. Who wants to work hard for a 6 months to a year for a 25 cent ($0.25) raise or 30 years just to get a pin saying you worked 30 years for the company.

[@glogloe1797]

It’s only worth it if you get a traditional retirement plan. I look long term, don’t care about those dumb gifts.

[@anitakristensen4679]

California and Florida the insurance companies are pulling out.

[@eddieg6436]

Insurance is legalized extortion

[@Overallsminion]

I pay $56 dollars a month on my new home in Texas for my insurance through USAA

[@fremontpathfinder8463]

Also earthquake insurance is really important in some areas of the country. In terms of jobs, teachers are really needed and some of these laid off workers should consider that.

[@premkumar-gw9qi]

In India not even 1% home is insured, we built brick home, even if their is forest fire nothing happens to home. No damage to home even uf we had bad renter at max it need fresh painting

[@mattp4079]

Most home owners will never file a claim in their lifetime. Forgo homeowners and get an umbrella policy for personal liability, in case someone trips on a crack in your driveway.

[@Tokamak3.1415]

It's a calculated risk. For most people who have a mortgage that would effectively kill any and all equity they have. You would still have equity in the land but have a $50K liability to clean a burned down house. If you don't do it in a timely manner the city will do it and put a lien against your property.

[@elysabeth0820]

Home insurance in the CA high desert is costing $3400 for a $600k home. No insurance company will cover fire only coverage through the state. You now need 2 different policies. This is ridiculous

[@techs1smh13]

New policy is just under 10k old was 4k. Same house 20 years So cal. We're out no more. Effing scam.

[@bataremerson1970]

Restaurants, fast food and retailers have been quiet cutting for decades. You just realized this?😂😂😂😂😂😂😂😂 Restaurants cut your hours or give you a really messed up schedule till you quit.

[@lindapindabelinda3570]

Much of the nation has uninsurable homes because they are too far away from a hydrant.

[@smokeskull]

The BC wildfires have wealthy people refusing to leave evacuation areas to protect there lake homes they were too cheap to buy insurance on. My neighbor even lost his truck when he returned to his home with 400 liters of fuel for his boat and pumps. Now he gets a new truck even tjough he broke the law returning to an evacuation zone. He can afford several Hawaiian vactations every winter but no insurance for his lake house

[@robbiefromcali]

Haha this guy said you "lose your possessions" like we haven't already started selling or have sold our possessions to make ends meet.

[@vincentmedina5438]

No that's the way you control the market for them to lower their prices when no one wants to pay for it they have no choice but to lower their prices

[@shaggydawg5419]

what do you meant no one wants to pay??? It is mandatory when you borrow money to purchase a car or home. Don't want to pay for insurance? Ok, lose your home/car. You can't win a fight against big corporations. That's how life is in the USA.

[@vincentmedina5438]

@@shaggydawg5419 I didn't pay insurance I didn't lose anything

[@peterbedford2610]

42% of home are owned free and clear. They can choose not to buy insurance....but, if you have a mortgage, your lender will not let you drop insurance.

[@dj-ii3ep]

Insurance is a SKAM

[@thediscussionvlogs5913]

Since all are pulling out it seems to give the only insurance covering California full advantage of thier existing customer like Farmer's. I dont blame the homeowner's, I'd have to find something elsewhere. I believe the insurance commissioner has to approve the increase, it seems he either does lowkey or they are just doing what they want. And since Mortgage insurance is a requirement, Im assuming those rejecting it have already paid ther mortgage to reconveyance.

[@Native722]

Wish we were back in 1950's. Now a days, most employers don't care about you.

[@truthiscensored]

As the saying goes "Today's price is not yesterday's price"

[@serenagophlin2413]

If your home is too old and there's only 3 companies that cost an arm and a leg. IF THEY INSURE YOU AT ALL😅

[@bobroberts2371]

To those that complain about insurance being too expensive and a scam: Here is your opportunity to state an insurance co , charge less and make $$$. 100% chance they won't

[@l.a.raustadt518]

The only time I did not have insurance on my house was when I was a busy truck driver. Forgot to pay! Good thing nothing happened just to have replacement coverage is worth the payments. Do not overextend your self money wise , insure!

[@SunSandandSurf]

Can't protect it when you can't afford it.

[@joeg7969]

Today In California, Car insurance, House insurance, Health insurance, Business insurance are freaking expensive ASF

[@philipchabot6064]

Ins is not what our parents had. It’s all about taken the money and not paying out when in need. Walk away if you can.

[@bryp775]

Companies have been doing this for years! I love the KTLA reporter enthusiasm acting like this is new. Companies have been doing this for decades! The old movie “Office Space” with actress Jennifer Aniston is about this quiet quitting. People don’t be hornswoggled!

[@uuubeut]

INSURANCE IS A CRIMINAL - they use on wallstreet and want homeowner bailout

[@azmike1]

It is my understanding that only those that own their homes outright can opt out of Home Insurance. Otherwise, if one has a mortgage, that person must buy Home Owners' Insurance or your lender will cause you big problems. Am I wrong?

[@plusblood5101]

I believe u r correct

[@aikanae1]

I don't have homeowners. It's not a choice.

[@jimbobfisher8904]

Ik forgoing car and home insurance for these next two years, oh well it’s just to ridiculous.

[@magicunicorn6535]

Try and even get insurance in CA.

[@anthonyhamilton6524]

Insurance is becoming a do or die situation. People can no longer afford insurance wether it car house life or medical. On top of the 20% it goes up every year.

[@alexmendez3681]

"Your home is the biggest purchase you'll ever make..." Dude just called me poor. 😂

[@kennethstauffer9220]

once you have a big claim your rates skyrocket and you are screwed again. may as well self insure. if you don't have the money for the repair, get a loan.

[@gagahusband]

Hey you guys have a typo in your video: The word, "home," is included here for no reason.

[@davidcarp5935]

It's good thinking, F insurance, they always try to weasel out of paying anything anyway.

[@leehuff5045]

How do they get by with that if they have a mortgage

[@tuber6382]

$52,000 a year is my new quote. I think your "shop around" idea is not working

[@solsaadi5399]

If the making payments they have to

[@Hunterlewis675]

The bank will add it, you can’t for go insurance

[@JimmyHuynhdesign]

Great content...video quality could improve

[@richm9455]

Mortgage holders require insurance.

[@kack7130]

I love these kind of vdos what if this and that. It depends how tolerance risk you can take. Roll the dice and see what happens

[@HappyHappy-sq4ij]

😂 these news guys are so out of touch. Employers have become increasingly predatory. Job hopping in a lot of cases is a result of toxicity or instability.

[@bobbyflores220]

you must be speaking to home owners not mortgage payers..

[@iroulis]

Yes. This is KTLA in Los Angeles CA. 30% of homes in CA are owned mortgage free.

[@nachc6459]

Or homeowners won’t cover it, and you’re still screwed

[@Overallsminion]

Buy a new build home. Insurance is cheaper, especially if it’s a smaller home.

[@bobbymoss6160]

Love how all the raise already high paying union people got went into paying for higher bills. Thanks for ruining it for everyone.

[@ThomasOsaki]

they can handle it until their home and everything in it is torched by criminals

[@TreHollywood]

Insurance is dumb

[@BabyBoomersDoomer]

Bro. I’m so sorry Generation Z

[@keithsnider1958]

Car insurance will be next.

[@Garda1962]

Selling fear! AAA your best bet.

[@user-gs6fq1jq8y]

Everything You say is BS...

[@propblast82nd]

Joe Biden’s great economy

[@starrider4878]

You have real assurance When you have god with you. Other wise there is no assurance 😂

[@tanyarae3]

How the hell can you afford insurance when they keep raising the taxes every year on your house you got to pick and choose.