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Thread: Insurance Questions

  1. #31
    Drew Wiley
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    Re: Insurance Questions

    Here massive earthquakes are a known inevitable hazard, and giant brush fires have already consumed almost entire cities. Accelerated global warming is only going to make things worse everywhere. At a more daily level, idiots playing with firecrackers are the more persistent risk. I simply can't afford 100% coverage at present rebuilding rates. Almost nobody can, especially in this area. The house is single story and the foundation well bolted; my property is level and atop granite down below. Any earthquake strong enough to outright wreck it all would unquestionably lead the insurance companies themselves into either default or bankruptcy anyway. Thousand of structures way more expensive than mine would be leveled, if an event was really that extreme. The last "big one", the Loma Prieta quake, merely tipped over a stack of magazines and shook a few pictures wire-suspended on the wall slightly out of level.

    I could replace every window on the house for less than the cost of a single year's worth of official earthquake insurance. Residential Fires are usually stopped in this city before they consume everything, because I'm a reasonable distance from the woodsy interface, with a wide freeway in between, and no petro industrial facilities nearby. You can't insure against everything - not against "acts of God" like an asteroid strike, or a world war, or seemingly against hoodies playing with fireworks nearly every night.

    If my whole house were to burn down, well, isn't that what old folks do anyway - move into something tiny that we can pay for? ... No, not my darkroom! - that's even has cement-asbestos siding (still perfectly legal, because the asbestos is integrally bound within the cement and very difficult to free up - just illegal to still manufacture) - and that building has a dedicated usage, off limits. If push comes to shove, we can simply live in a back yard tent, along with the outdoor cats instead of the indoor ones, and look around to see where they bury their own litter. That worked for the first million years of human culture.

  2. #32
    Pieter's Avatar
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    Re: Insurance Questions

    Quote Originally Posted by Drew Wiley View Post
    Here massive earthquakes are a known inevitable hazard, and giant brush fires have already consumed almost entire cities. Accelerated global warming is only going to make things worse everywhere. At a more daily level, idiots playing with firecrackers are the more persistent risk. I simply can't afford 100% coverage at present rebuilding rates. Almost nobody can, especially in this area. The house is single story and the foundation well bolted; my property is level and atop granite down below. Any earthquake strong enough to outright wreck it all would unquestionably lead the insurance companies themselves into either default or bankruptcy anyway. Thousand of structures way more expensive than mine would be leveled, if an event was really that extreme. The last "big one", the Loma Prieta quake, merely tipped over a stack of magazines and shook a few pictures wire-suspended on the wall slightly out of level.

    I could replace every window on the house for less than the cost of a single year's worth of official earthquake insurance. Residential Fires are usually stopped in this city before they consume everything, because I'm a reasonable distance from the woodsy interface, with a wide freeway in between, and no petro industrial facilities nearby. You can't insure against everything - not against "acts of God" like an asteroid strike, or a world war, or seemingly against hoodies playing with fireworks nearly every night.

    If my whole house were to burn down, well, isn't that what old folks do anyway - move into something tiny that we can pay for? ... No, not my darkroom! - that's even has cement-asbestos siding (still perfectly legal, because the asbestos is integrally bound within the cement and very difficult to free up - just illegal to still manufacture) - and that building has a dedicated usage, off limits. If push comes to shove, we can simply live in a back yard tent, along with the outdoor cats instead of the indoor ones, and look around to see where they bury their own litter. That worked for the first million years of human culture.
    Have you priced earthquake insurance? You must live in a house with very few, single-glaze windows. Yes, the deductibles are quite high and, like flood insurance, there is only one underwriter, the state (California Earthquake Authority in this case). After the Northridge Earthquake in the 90's all the insurance companies stopped writing earthquake policies. A catastrophic earthquake will be devastating, so are the current wildfires. But your photo gear might survive an earthquake better than a fire--unless the earthquake sets off residential fires--very possible (San Francisco, 1906).

  3. #33

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    Re: Insurance Questions

    Quote Originally Posted by Drew Wiley View Post
    pjd - an aside, but the very first helicopter rescue done in relation to Everest was done by an uncle of mine, an engineer sent by the US to replace certain rope bridges in Nepal with steel ones, who had the only helicopter in the country at that time. He rescued the two famous frostbitten climbers from the first successful US expedition up Everest, namely, the two who had pioneered the West Ridge route, Unsoeld and Hornbein, if I am spelling their names correctly. It was an extremely expensive expedition sponsored by National Geographic Society. And it was a risky helicopter operation never attempted before at that kind of altitude, and Natl Geo never did reimburse even the fuel expense, let alone publicly acknowledge the favor. They always prefer to toot their own horn.

    I was 12 at the time, and my uncle and aunt invited me to spend a year in Nepal with them. But I was rather sick at the time, so a cousin went instead.
    Drew, thanks for mentioning that. I just looked up that west ridge expedition, it very interesting. I see Thomas Hornbein published a book about the expedition.

    Back to helicopter flights, I remember seeing a helicopter take off at the last lodge before base camp, it didn't seem a big deal at the time. The next morning we set off on a path towards Gokyo Ri and I remember feeling uneasy looking down from a ridge and seeing a helicopter quite some distance below me shadowing the valley floor. At first I wondered why it was flying so low above the ground, then realized it couldn't fly much higher. Your uncle had some grit.

  4. #34
    Drew Wiley
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    Re: Insurance Questions

    Yes, now helicopter flights and rescues into the area are common, even if still sometimes risky. But back then it set an altitude precedent, and was way up on the side of a glacier well above base camp, probably around 20,000 feet. But it was a specially adapted chopper. I've seen pictures, but can't remember all the details. And somebody borrowed my only copy of my uncle's autobiography, so I can't check that. Unsoeld's daughter died when she attempted to climb Nanda Devi in India with him, from altitude sickness as I recall, and Unsoeld himself died later in an icefall on a routine training climb on Mt Rainer. You can only roll the dice so many times. Some of those Himalayan superstars survive to old age, many do not. Notable climbers used to hang around my house before I was married, so I heard a lot of stories firsthand. Some cats seem to have more than nine lives.

  5. #35
    Drew Wiley
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    Re: Insurance Questions

    Pieter - as you no doubt know, most of the '06 SF earthquake damage was actually due to fire. After a prior severe quake in the 1880's, which actually liquified the ground under what is now downtown SF, certain building standards were imposed in SF, including more secure chimneys. That 1880's quake and another severe one slightly earlier actually originated on this side of the Bay, along the Hayward Fault, which is just a few blocks from me. There was little damage around here at the time because it was mostly all farmland or otherwise undeveloped.

    But many homeowner policies, including mine, will cover FIRE damage per se, even if a quake was involved. All I was hinting at is that if a quake was so severe as to affect thousands of buildings in the area, the major carriers would likely default anyway - it would just be too expensive for them to handle. You can't insure for everything, just common sense risks and liabilities.

    As far as what windows cost, the business I worked for was the biggest Marvin dealership west of the Mississippi, and the official warranty handler for all of northern California. We always got paid and won, even when the property owner, contractor, and architect were all at war with one another, pointing the finger of blame, and suing each other for some expensive mishap. Ultimately, we held all the cards, no matter who sold the windows to them. I've seen a steel clad window sixty feet across needing replacement due to improper installation, involving 30K per day overhead, with a big crane n all. All the squabblers had already lost 50K apiece to lawyers.

    I didn't work in that Dept per se, but was routinely consulted over sealants, coatings, and necessary equipment to facilitate efficient replacement, and sometimes did training seminars. Obviously, I also had an inside track if I needed any window or door work myself. But the climate here is very temperate, and my heating bills are low. On any kind of NEW construction, however, double glazed windows are mandatory code.

  6. #36
    Pieter's Avatar
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    Re: Insurance Questions

    Quote Originally Posted by Drew Wiley View Post
    Pieter - as you no doubt know, most of the '06 SF earthquake damage was actually due to fire. After a prior severe quake in the 1880's, which actually liquified the ground under what is now downtown SF, certain building standards were imposed in SF, including more secure chimneys. That 1880's quake and another severe one slightly earlier actually originated on this side of the Bay, along the Hayward Fault, which is just a few blocks from me. There was little damage around here at the time because it was mostly all farmland or otherwise undeveloped.

    But many homeowner policies, including mine, will cover FIRE damage per se, even if a quake was involved. All I was hinting at is that if a quake was so severe as to affect thousands of buildings in the area, the major carriers would likely default anyway - it would just be too expensive for them to handle. You can't insure for everything, just common sense risks and liabilities.

    As far as what windows cost, the business I worked for was the biggest Marvin dealership west of the Mississippi, and the official warranty handler for all of northern California. We always got paid and won, even when the property owner, contractor, and architect were all at war with one another, pointing the finger of blame, and suing each other for some expensive mishap. Ultimately, we held all the cards, no matter who sold the windows to them. I've seen a steel clad window sixty feet across needing replacement due to improper installation, involving 30K per day overhead, with a big crane n all. All the squabblers had already lost 50K apiece to lawyers.

    I didn't work in that Dept per se, but was routinely consulted over sealants, coatings, and necessary equipment to facilitate efficient replacement, and sometimes did training seminars. Obviously, I also had an inside track if I needed any window or door work myself. But the climate here is very temperate, and my heating bills are low. On any kind of NEW construction, however, double glazed windows are mandatory code.
    So, the cost of replacing all your windows would less than the cost of earthquake insurance? Maybe over a few years, but the next big earthquake could be today. The whole idea of having earthquake insurance is for catastrophic coverage. And the major insurers don't underwrite earthquake insurance anyway. The CEA does and FEMA would step in, as they have in the past.

  7. #37
    Drew Wiley
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    Re: Insurance Questions

    It would be awfully difficult to recoup the ridiculously high expense of earthquake insurance. And anything really severe would wipe out the State Fund anyway. And it might not cover something like soil liquification near the Bay or ocean, which could require yet another very expensive specialized kind of flood insurance, with its own set of loopholes. If would be far wiser to spend one's money on structural seismic upgrades to you home than on a supplement EQ Insurance. And that's what nearly everyone has figured out by now. So not much money even gets funneled into that State fund anyway.

    FEMA is nothing more than a temporary Band Aid - helpful, but only a drop in the bucket. And as extreme climate incidents continue to accelerate, just how long can that financial strain hold up on a national level, especially if people insist on rebuilding in highly susceptible locations over and over again.

    And as I learned as a building materials supplier following our big Oakland fire 20 yrs ago, "total replacement" policies can get watered down to almost nothing after an extreme event. For example, Allstate deliberately hired convicted felons as insurance adjusters. A craftsmen home that might cost a couple millions dollars to truly replace per contract, using high end materials and skilled local labors, would get estimated by them merely per square footage lost, or number of rooms, at lowest bidder Midwestern labor rates using cheapo subdivision materials at maybe 15% the real replacement cost; and if you didn't like it, get in line to go to court, and wait up to five years. Farmer's Insurance did the same thing. Illegal? You betcha! But given the sheer scale of that fire, it was either pay out as slow as possible or go into default. So read not only the fine print, but all the invisible ink in between those lines themselves.

    But at a small scale you and me level, and hypothetical issues like incidental equipment loss, it really does help not to abuse your contract. Don't cry wolf unless it's really necessary.

  8. #38
    Pieter's Avatar
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    Re: Insurance Questions

    Quote Originally Posted by Drew Wiley View Post
    It would be awfully difficult to recoup the ridiculously high expense of earthquake insurance. And anything really severe would wipe out the State Fund anyway. And it might not cover something like soil liquification near the Bay or ocean, which could require yet another very expensive specialized kind of flood insurance, with its own set of loopholes. If would be far wiser to spend one's money on structural seismic upgrades to you home than on a supplement EQ Insurance. And that's what nearly everyone has figured out by now. So not much money even gets funneled into that State fund anyway.

    FEMA is nothing more than a temporary Band Aid - helpful, but only a drop in the bucket. And as extreme climate incidents continue to accelerate, just how long can that financial strain hold up on a national level, especially if people insist on rebuilding in highly susceptible locations over and over again.

    And as I learned as a building materials supplier following our big Oakland fire 20 yrs ago, "total replacement" policies can get watered down to almost nothing after an extreme event. For example, Allstate deliberately hired convicted felons as insurance adjusters. A craftsmen home that might cost a couple millions dollars to truly replace per contract, using high end materials and skilled local labors, would get estimated by them merely per square footage lost, or number of rooms, at lowest bidder Midwestern labor rates using cheapo subdivision materials at maybe 15% the real replacement cost; and if you didn't like it, get in line to go to court, and wait up to five years. Farmer's Insurance did the same thing. Illegal? You betcha! But given the sheer scale of that fire, it was either pay out as slow as possible or go into default. So read not only the fine print, but all the invisible ink in between those lines themselves.

    But at a small scale you and me level, and hypothetical issues like incidental equipment loss, it really does help not to abuse your contract. Don't cry wolf unless it's really necessary.
    Convicted felons range in their ability to do a job. It is the ones that don't get convicted that are of more concern to me. And FEMA is just as bad as the insurance co.s at handing out money. After the Northridge quake, I had more damage than some in higher-end neighborhoods, while some of them got generous grants covering repairs (and then some), I ended up with a puny SBA loan. BTW, replacing all the windows in my house is about 15x the annual cost of earthquake insurance for me. You must live in a very high-risk area. Needless to say, I have made structural improvements since then. Fingers crossed.

  9. #39

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    Re: Insurance Questions

    After the Northridge earthquake I, too, had a lot of damage, applied for and got a small grant, shouldered the cost for more than 90% of the repairs. Never asked the insurance company for anything, and was rewarded for that with a cancellation notice. A bad memory…

  10. #40
    Drew Wiley
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    Re: Insurance Questions

    Even though I live in the Bay Area, I have a lot of specific knowledge of certain widespread underlying structural failures tied to the LA Northridge event.
    A lot of it has to do with corners having been cut, and second rate framing materials being the custom there, and even improperly trained inspectors. I could go into detail, but it's impertinent to the present topic. Up here, we once had a chronic different yet analogous issue involving the post-WWII housing boom, back when time wasn't taken to properly wash the salt out of the sand unused for foundation concrete, leading to all kinds of cracking and failures. And once foundation plates started being retro-bolted down, the bolts would corrode within six months due to all the salt. It took awhile for far better structural epoxy options and specialized brackets to arrive.

    Foundation problems also came into play after the Oakland Hills fire. It got so hot that some otherwise good foundations actually cracked incurably. And replacing them according to code safety standards would often cost far more than the entire amount the insurance companies would allot for the entire reconstruction project, typically two or three hundred thousand dollars just for that, before any other construction could even begin, but maybe following 75K of just site cleanup prior to even that. That's when they sent in "inspectors" deliberately trained to overlook structural failures and file false reports. Without a proper foundation, a house is worthless and can't even be legally occupied.

    Now the big scam is in the forest fire zones. Insurance agents are actually being commissioned to cancel insurance policies, and then refer the homeowner to a special high-risk insurance company instead, charging far more, which of course, happens to be owned by the very same parent company. Well, they probably have to do that just to survive as a corporation looking at one massive fire incident after another these days. But they could at least be honest about why they need to charge more, and not leave people potentially hanging, with possibly no coverage at all, right when they most need reliable fire insurance.

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