Suze Orman, the finance guru known for her sharp advice, has a bone to pick with home insurance companies. At 72, she’s decided enough is enough for the wild costs of insuring her Florida beachfront condo – and she’s speaking out.
Don’t Miss:
In an interview with DailyMail.com, Orman said she’s been quoted $28,000 yearly for home insurance on her 2,100-square-foot Florida condo. Let that sink in for a second. “$28,000 for a 2,100-square-foot condo. Are you kidding me?” she said, shocked by the price tag.
Luckily for Orman, she can self-insure, meaning she doesn’t need the policy. But her worry? Most Americans aren’t in the same boat, and she’s worried this insurance crisis could push the American dream of homeownership even further out of reach.
Trending: Founder of Personal Capital and ex-CEO of PayPal re-engineers traditional banking with this new high-yield account — start saving better today.
Orman didn’t hold back, explaining how climate change is wreaking havoc not just on the environment but on our wallets too. “Climate change is going to make a big difference in people’s desire to own their own home,” she said. “Look at what’s happening in Southern California. Look at the devastating hurricanes that are coming to places where hurricanes weren’t so prevalent before.”
And the numbers back her up. The National Oceanic and Atmospheric Administration (NOAA) reported 28 billion-dollar natural disasters across the U.S. last year. As you’d expect, this has sent insurance costs soaring. According to the National Association of Realtors, the average home insurance premium is now $2,377 a year – and rising. Homeowners can expect to pay 6% more by the end of the year.
In Florida, NAR reports the average insurance price to be around $11,700 for 2024. According to their estimates, Louisiana homeowners can expect to pay close to $8,000 by the end of the year. “It’s possible that the highest-risk areas will become uninsurable,” says Betsy Stella, vice president of Carrier Management and Operations at Insurify, as rising risks make coverage increasingly difficult to obtain.
See Also: Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you.
Orman warns that if these insurance prices keep climbing, many will think twice about homeownership. “Real estate is unpredictable. I never would have thought to advise homebuyers, ‘Oh, you better make sure you can afford a quadrupling of property insurance in the future,'” she added.
For many homeowners, though, there’s no escaping these costs. If you’re buying a home with a mortgage, you can’t close the deal without insurance. Orman, however, owns her condo outright, so she can opt out. Her choice? Skip the $28,000 a year premium. “I’m not paying $28,000 a year when the insurer will probably contest any claim I get anyway,” she said bluntly.
Wildfires, floods, and tornadoes are occurring more often, forcing insurers to raise premiums or leave the game altogether. Allstate recently approved a 34% increase for California homeowners, taking effect in November. In June, State Farm increased rates in the state by 30%.
Trending: The average American couple has saved this much money for retirement — How do you compare?
So, what’s the take-away here? Orman’s got a point. Climate change, rising repair costs, and an under-pressure insurance industry are reshaping what owning a home in America means. And while Orman has the means to skip the insurance headache, many others don’t. As she warns, the dream of owning a home might get much more complicated – and expensive.
Read Next:
UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets.
Get the latest stock analysis from Benzinga?
This article Suze Orman Isn’t Wasting Money On Insurance For Her Condo – ‘I’m Not Paying $28,000 A Year When The Insurer Will Probably Contest Any Claim’ originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Source: finance.yahoo.com