On Sunday, January 12, 2025 at 3:35:10 PM UTC-7 Brent Meeker wrote:
On 1/12/2025 4:36 AM, Alan Grayson wrote: On Sunday, January 12, 2025 at 2:43:02 AM UTC-7 Brent Meeker wrote: On 1/11/2025 2:16 PM, Alan Grayson wrote: On Saturday, January 11, 2025 at 1:55:12 PM UTC-7 John Clark wrote: On Sat, Jan 11, 2025 at 2:17 PM Alan Grayson <agrays...@gmail.com> wrote: *> What isn't being discussed is the likely banking crisis as a result of these fires. With entire neighhoods burning out of existence, I wouldn't be surprised if there's a Trillion+ dollars of bad debt being created, as homeowners default on their mortgages.* *The figure I've heard is $135 billion in fire damage, it would take more than that to cause a banking crisis. * *John K Clark See what's on my new list at Extropolis <https://groups.google.com/g/extropolis>* That's just a preliminary estimate for rebuilding houses and *total *infrastructure replacement. Three months ago, State Farm, a major insurance company, cancelled 70% of its fire insurance policies in the LA area, so I infer that most homeowners are uninsured, and those that are, likely won't collect anything since insurance is not structured for this type of near global disaster and many will declare bankruptcy to avoid paying and going under. Fire Insurance works when there are sporadic fires, not as in this case where entire towns are wiped out, like Altadena, north and east of Pasadena where I resided when I worked for JPL, and Pacific Palisades, and some others. Given the number of homes totally destroyed and the likely lack of insurance among a majority of residents, IMO the total damage, including mortgage defaults, could exceed one TRILLION dollars. AG Remember, those properties were almost all insured. The insurance companies also buy reinsurance so they spread the risk further. A trillion dollars is probably high for rebuilding everything. There were around a thousand homes and buildings burned, I'd estimate around 500K$ per house to rebuild. The insurance companies will pay off. They many not want to insure new homes, but the state may require them to or else not do any business in CA. Brent The number of buildings burned is around 10,000 and counting, and probably most were not insured for fire. I have a friend from JPL who lives in La Verne and he's not insured for fire because, he said, the annual rate is too high. He mentioned it as $15,000. If he's not insured for fire that means he doesn't have a mortgage, which means he owns his home outright. Median home price is just under 1M$ so insuring it for 1.5% is quite reasonable, especially if his home on the north side against the mountains. Of course now there may not be any insurance available, except the State provided backup plans...is that what he thought was too expensive? Leaving CA could be the best option for insurance companies rather than going bankrupt. AG You sound like an insurance executive who thinks having to pay out is an unforeseen event. Insurance companies payout of catastrophe's all the time. Nobody buys insurance to protect against ordinary small risks. Brent My belief is that insurance companies generally contemplate sporadic fires, not those on such a massive scale. I will call my friend later this week to dermine if he owns his home. He's working strange hours because the fire is close to JPL. He does the commanding for one of the Mars rovers, and we were in the same group for many years when I worked at the Lab. AG -- You received this message because you are subscribed to the Google Groups "Everything List" group. To unsubscribe from this group and stop receiving emails from it, send an email to everything-list+unsubscr...@googlegroups.com. To view this discussion visit https://groups.google.com/d/msgid/everything-list/9920a13f-7703-4d28-be8e-594ac9a1d6abn%40googlegroups.com.
