Insurance companies need to charge more than they pay out in order to be able to cover wages/salaries of their employees (assessor’s, customer service, sales etc.). So if an insurance provider’s risk model for the Palisades is that there is a >50% chance that the house will burn down again in the next 10 years - then they will need to charge like ~10% of the home’s value per year just to break even (ie. no profits for shareholders to leech off of).
The insurance premiums would be higher than the mortgage, and that’s assuming the insurance companies would firstly be able to sell such a coverage plan (ie. can it even be afforded), and that they don’t view the risk of miscalculating and making a loss as too great and pulling out of the market altogether.
Now don’t take this as a blanket defence of the insurance industry at large. There are plenty of companies (especially in the health sector) that are some of the scummiest on the planet - but asset insurance companies already largely work off making a very small amount of money off a large number of policies.
Insurance companies need to charge more than they pay out in order to be able to cover wages/salaries of their employees (assessor’s, customer service, sales etc.). So if an insurance provider’s risk model for the Palisades is that there is a >50% chance that the house will burn down again in the next 10 years - then they will need to charge like ~10% of the home’s value per year just to break even (ie. no profits for shareholders to leech off of).
The insurance premiums would be higher than the mortgage, and that’s assuming the insurance companies would firstly be able to sell such a coverage plan (ie. can it even be afforded), and that they don’t view the risk of miscalculating and making a loss as too great and pulling out of the market altogether.
Now don’t take this as a blanket defence of the insurance industry at large. There are plenty of companies (especially in the health sector) that are some of the scummiest on the planet - but asset insurance companies already largely work off making a very small amount of money off a large number of policies.