Insurance Discussion [Split from Slave Lake Thread]

[photon]

I actually had my basement flooded 3 times too.. the first time was the big one. The second time was the day after I'd just finished laying down laminate flooring.. wasn't high enough to damage the walls, but enough to wreck the whole basement's worth of laminate.

The third time? A week after I'd finished putting in the 2nd round of laminate.

I put in lino after that.

[BlackArcher101]

Sorry to bark up the wrong tree tonight. Did more googling and found the Alberta Disaster Relief Fund. Guess it makes sense once I think about it more.

The province only provides disaster relief when the damage is widespread, extraordinary and uninsurable.

Sounds like a shoe-in for Slave Lake.

But I guess the key word is uninsurable. Would normal house insurance coverage cover a forest fire? (I have no clue... I'm guessing act of god, so no?)

[photon]

Originally Posted by puckluck

Anyways back to Slave Lake... I'm thinking they will help out the uninsured in this situation probably not fully since that would likely cost in the hundreds of millions if not billions, but they'll do something to help the people out. Not doing so would be a shame.

Yeah I see both sides.. it's not like a situation like flooding where you might lose some stuff or have to rip out the drywall, in this case you're talking about people becoming homeless.

Not just homeless, but homeless with a mortgage to pay on something that doesn't exist anymore.. they can't get a new mortgage for a new home because they already have a mortgage!

But rewarding dumb behaviour (not having insurance) always feels wrong, I guess I have a little libertarian in me.

[puckluck]

Originally Posted by photon

I actually had my basement flooded 3 times too.. the first time was the big one. The second time was the day after I'd just finished laying down laminate flooring.. wasn't high enough to damage the walls, but enough to wreck the whole basement's worth of laminate.

The third time? A week after I'd finished putting in the 2nd round of laminate.

I put in lino after that.

Yeah, it can really be a headache. It used to flood all the time on one side of the house so I dug up about a foot deep and a foot wide around the side of the house and put in concrete. It's been pretty good since.

[Dan02]

I'm confused there are people who don't have fire coverage on their property?? Correct me if I'm wrong but isn't that usually a requirement of your mortgage/loan??

And if they were free and clear and made the willful decision not to have insurance coverage on their property, congratulations, you just paid the stupid tax. I'm just a cold hearted b**** I guess.

I've got no problem with the government bailing people out who couldn't get insurance for a particular issue, like the flooding, or if the insurance companies are trying not to pay based on some stupid technicality but fire is a pretty damn common event of property loss.

I'd have to look it up, but I'm pretty sure my insurance is around 0.25% of my properties value annually, maybe around 0.33%. In other words dirt cheap compared to what you're protecting.

What makes it more ridiculous to me is if it was a single house that burned down and the guy didn't have insurance, it'd be in the local paper tomorrow and that'd be the end of it the guy would be SOL. But because it's a large scale headline maker, the bleeding hearts are going to want to help out the poor aka stupid people who didn't have insurance.

[photon]

Heh I sold that house shortly after all that flooding. I did put in a sump pump that ran a LOT after putting it in. Must be some weird shaping of clay under ground on that hill or something to make the ground water level so high there.

[photon]

Originally Posted by Dan02

What makes it more ridiculous to me is if it was a single house that burned down and the guy didn't have insurance, it'd be in the local paper tomorrow and that'd be the end of it the guy would be SOL. But because it's a large scale headline maker, the bleeding hearts are going to want to help out the poor aka stupid people who didn't have insurance.

One guy doesn't much effect the economy, but if you have a large percentage of people in a town suddenly bankrupt, that can impact a lot more than just the ones who didn't have insurance.

So it's not just "bleeding hearts", though being nice to people that sometimes make bad decisions isn't a bad thing, I don't think there's anyone that can say they haven't made a bad decision that could have gone horribly wrong if there hadn't been someone there to help.

Good point about the mortgage requirements.

[HOOT]

Originally Posted by BlackArcher101

But I guess the key word is uninsurable. Would normal house insurance coverage cover a forest fire? (I have no clue... I'm guessing act of god, so no?)

Yes. Unless it's excluded from your policy which probably isn't the case most of the time unless you got the wrong policy. Many acts of god are covered, it's a misconception of insurance, almost like a myth.

[BlackArcher101]

Originally Posted by HOOT

Yes. Unless it's excluded from your policy which probably isn't the case most of the time unless you got the wrong policy. Many acts of god are covered, it's a misconception of insurance, almost like a myth.

If that is true, and a typical home insurance policy covers the loss from this fire, then IMO the the government should not cover someones loss when the owner decided not to cover it. I can see if forest fire insurance wasn't available or "uninsurable" as the goverment puts it, then yes... by all means give them disaster money. That would be the same issue as above with Photon and PuckLuck... flood damage insurance was not available.

[HOOT]

Originally Posted by Dan02

I'd have to look it up, but I'm pretty sure my insurance is around 0.25% of my properties value annually, maybe around 0.33%. In other words dirt cheap compared to what you're protecting.

In BC, without Earthquake coverage, the average is about 0.11% of the replacement value (rebuild cost) on the home, and about 0.05% of the property value. With Earthquake it's about double that.

It's crazy how people don't protect their property when it costs so little to do so, especially with home and/or contents insurance.

[Dan02]

Originally Posted by photon

One guy doesn't much effect the economy, but if you have a large percentage of people in a town suddenly bankrupt, that can impact a lot more than just the ones who didn't have insurance.

So it's not just "bleeding hearts", though being nice to people that sometimes make bad decisions isn't a bad thing, I don't think there's anyone that can say they haven't made a bad decision that could have gone horribly wrong if there hadn't been someone there to help.

Good point about the mortgage requirements.

Well the people with a mortgage/loan should have insurance and be covered so they're fine, the people without insurance should be free and clear on their property so they're not going to be bankrupt either worst case they've still got the property to sell.

and lets flipside this and not try to put a positive spin on this disaster, but assuming most people rebuild and don't take the money from their insurance company run, Slave is about to experience a boom in its economy over the next year or two that it hasn't seen in its past nor will again in it's future. Many houses/buildings to rebuild in a short time frame, any remaining hotels are going to be packed to the rafters and most with outside money from the insurance companies.

So that being said I don't really buy the argument that not bailing those people out will have a severely detrimental effect on the economy of Slave.

The thing is, if the government is going to bail these guys out, you might as well turn the property insurance sector public, make it mandatory to have property insurance and charge it with your property taxes. Atleast then people who aren't paying in aren't taking from the system.

and damn right I've made tons of moronic decisions in almost every aspect of my life, never once has the government stepped in with money to recoup my losses. bad business partners?? nope. Deadbeat tenants?? nope. soul sucking ex-wife?? nope. Hell I had one business partner take off leaving me 10k in the hole, what did the government try and do? charge me taxes on it.

The social safety net needs to be restricted to helping those in situations where the event was unforeseeable and/or uninsurable. Yeah, the forest fire was rather unforeseeable, but the actual cause of loss, in this case fire, was neither unforeseeable nor uninsurable.

That being said I have no problem with the government blowing the proverbial wad in getting emergency supplies up there. But as for the actual rebuild, nope.

[HOOT]

Originally Posted by BlackArcher101

If that is true, and a typical home insurance policy covers the loss from this fire, then IMO the the government should not cover someones loss when the owner decided not to cover it. I can see if forest fire insurance wasn't available or "uninsurable" as the goverment puts it, then yes... by all means give them disaster money. That would be the same issue as above with Photon and PuckLuck... flood damage insurance was not available.

I can guarantee that in Alberta you are able to buy an All Risk policy which would include any loss except some exclusions like you lighting your own house on fire, etc.

Of course most insurance companies hide their wordings like bitch on their website so I can't look at the exact exclusions right now to see if forest fire is one of them but I highly doubt it, at least with an All Risk policy. Like in BC one of the exclusions is Earthquake, but you can purchase that on top of your policy, which is why the government wouldn't help in that situation.

[speede5]

Lots of people have trouble insuring their properties, it's not always negligence. With the way costs of living keep going up it's easy to see it happening. I can barely afford insurance, at 1200 a year for bare minimum I can see how people let it lapse. A bigger problem is being underinsured, when the cost to build goes up as fast as the price of gas many people are left underinsured, I would suspect the cost to rebuild in Slave lake will be quite a bit higher than even some of the best insured homes.

[Dan02]

Originally Posted by speede5

Lots of people have trouble insuring their properties, it's not always negligence. With the way costs of living keep going up it's easy to see it happening. I can barely afford insurance, at 1200 a year for bare minimum I can see how people let it lapse. A bigger problem is being underinsured, when the cost to build goes up as fast as the price of gas many people are left underinsured, I would suspect the cost to rebuild in Slave lake will be quite a bit higher than even some of the best insured homes.

Trouble insuring?? as in insurance companies won't cover them for some reason or they can't afford it? If it's the latter, perhaps homeownership isn't for them.

And to be honest it's been probably 4+ years since I read my insurance policy, but I'm pretty sure it's has guarenteed replacement cost included,meaning of course, it gets rebuilt on the insurance companies tab even if it costs 100 times as much as valued at, the only things limited are contents and incidentals. No idea how common this type of policy is, but as mentioned earlier and if someone knows for sure feel free to correct me. I'm pretty sure it's a requirement for a mortgage.

[hmmhmmcamo]

I can see both sides to this argument.

But in the end I keep thinking about Canada's reputation of rallying/stepping up (financially) during international times of crisis....Haiti earthquake, Japan earthquake/tsunami, Katrina, Afghanistan, floods everywhere etc. I don't recall any investigations into insurance policies being discussed before our country decided to contribute to their relief efforts.

So given our commitment to helping people in need.....how do we just say "nope" to the people of Slave Lake when they need help recovering from a major disaster?...."Sorry, you should have had the proper insurance knowing that a freak fire like this could wipe out your whole community at any time was a possibility."

[Deegee]

Originally Posted by Dan02

I'm confused there are people who don't have fire coverage on their property?? Correct me if I'm wrong but isn't that usually a requirement of your mortgage/loan??

Yes, and I'm sure it is in the Mortgage terms that your friendly neighborhood banker will debit the loan itself and buy insurance on your behalf if you don't and/or won't.

[speede5]

You are required to provide proof of insurance when you sign your mortgage, but there is no enforcement on maintaning it.

I don't disagree that it is something you should have on your property, I'm just saying that as things spiral upwards in cost, like my fuel bill which has almost doubled in the last 6 months, other areas suffer.

Again I think the bigger problem is underinsurance, and no, everyone doesn't have replacement value, mine is a specific cap, and since I have been renovating since moving I adjust it after every major milestone.

[Raekwon]

Originally Posted by speede5

You are required to provide proof of insurance when you sign your mortgage, but there is no enforcement on maintaning it.

I don't disagree that it is something you should have on your property, I'm just saying that as things spiral upwards in cost, like my fuel bill which has almost doubled in the last 6 months, other areas suffer.

Again I think the bigger problem is underinsurance, and no, everyone doesn't have replacement value, mine is a specific cap, and since I have been renovating since moving I adjust it after every major milestone.

Not being sufficiently insured is a big problem but how is that the problem of anyone besides the homeowner? Owning a home is more than just paying a mortgage and living there. When people renovate or make bigger purchases they should review their policy for sufficient coverage the problem is people don't do it because they don't want their rates going up.

[HOOT]

Originally Posted by speede5

Lots of people have trouble insuring their properties, it's not always negligence.

If your property is so poorly maintained that you can't get insurance then your loss won't be that much anyways and you probably needed to rebuild anyways.

With the way costs of living keep going up it's easy to see it happening. I can barely afford insurance, at 1200 a year for bare minimum I can see how people let it lapse.

People should move into a smaller home or start renting so you can afford all the costs associated with living. Just because someone lives outside their means doesn't mean the tax payer should pick up the slack.

A bigger problem is being underinsured, when the cost to build goes up as fast as the price of gas many people are left underinsured, I would suspect the cost to rebuild in Slave lake will be quite a bit higher than even some of the best insured homes.

And this is a problem with helping the uninsured. Not only will it cost a lot more for the government to rebuild the homes of those who didn't buy insurance, it will also increase the cost to rebuild for the insurance companies. This will then raise the rates for all those people that actually buy insurance, while the person without insurance won't be effect and have their home rebuilt by the tax payer at a greater cost.

[HOOT]

Originally Posted by hmmhmmcamo

So given our commitment to helping people in need.....how do we just say "nope" to the people of Slave Lake when they need help recovering from a major disaster?...."Sorry, you should have had the proper insurance knowing that a freak fire like this could wipe out your whole community at any time was a possibility."

It doesn't matter that it was a freak fire that took out their entire community, they should still be prepared for a fire. Forest fires aren't some new thing that just popped on in the middle of Alberta. I read last night that there are 100+ forest fires active right now in Alberta, and almost 20 started in the last 24hrs (when I read the report). So saying this is a freak incident is crazy and as a homeowner they should have been prepared for a forest fire, doesn't matter that it was the whole town.

Also just to be clear I still think we should help these people with the basic essentials of life but we shouldn't be rebuild their homes or replacing their TV's and couches. If people want to donate money to help these people replace those things that's fine but the government shouldn't be involved in rebuilding people's homes because they weren't prepared for a peril that happens 100's of times in the province every year.