Suze Orman, the financial guru known for her sharp advice, has a bone to pick with home insurance companies. At 72, she’s decided she’s had enough of the skyrocketing cost of insuring her Florida beachfront condo — and she’s speaking out.
Don’t miss:
In an interview with DailyMail.com, Orman said she was getting $28,000 a year for home insurance on her 2,100-square-foot Florida condo. Let that sink in for a moment. “$28,000 for a 2,100-square-foot condo. Are you kidding me?” she said, shocked by the price tag.
Fortunately for Orman, she can insure herself, meaning she doesn’t need the policy. But her worries? Most Americans aren’t in the same boat, and she worries that this insurance crisis will push the American dream of home ownership even further out of reach.
Trending: Founder of Personal Capital and former CEO of PayPal Redesigns traditional banking with this new high-yield account: start saving better today.
Orman didn’t hold back, explaining how climate change is not only devastating the environment but also our wallets. “Climate change is going to make a big difference in people’s desire to own their own homes,” she said. “Look at what’s happening in Southern California. Look at the devastating hurricanes that are coming to places where hurricanes weren’t as prevalent before.”
And the numbers back her up. The National Oceanic and Atmospheric Administration (NOAA) reported $28 billion in natural disaster losses in the U.S. last year. As you might expect, this has sent insurance costs through the roof. According to the National Association of Realtors, the average home insurance premium is now $2,377 a year — and it’s still rising. Homeowners can expect to pay 6% more by the end of the year.
In Florida, NAR reports that the average insurance price is around $11,700 for 2024. According to their estimates, homeowners in Louisiana can expect to pay nearly $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 it increasingly difficult to get coverage.
See also: Do you know how many Americans retire with $1,000,000 in savings? The percentage may shock you.
Orman warns that if these insurance prices continue to rise, many will think twice about homeownership. “Real estate is unpredictable. I would never think to advise homebuyers, ‘Oh, you have to make sure you can afford to quadruple the property insurance in the future,'” she added.
For many homeowners, however, there’s no way around these costs. If you buy a home with a mortgage, you can’t close the deal without insurance. Orman, however, owns her condo outright, so she can choose not to insure. Her choice? Skip the $28,000-a-year premium. “I’m not going to pay $28,000 a year when the insurer is probably going to dispute every claim I get anyway,” she said bluntly.
Wildfires, floods and tornadoes are becoming more common, forcing insurers to raise premiums or drop the sport altogether. Allstate recently approved a 34% increase for California homeowners insurance, effective in November. In June, State Farm raised rates in the state by 30%.
Trending: The average American couple has this amount saved for retirement: How do you compare?
So what’s the takeaway here? Orman has a point. Climate change, rising repair costs, and a beleaguered insurance industry are changing what it means to own a home in America. And while Orman has the means to avoid the insurance headaches, many others don’t. As she warns, the dream of home ownership could become a lot more complicated—and expensive.
Read more:
UNLOCKED: 5 NEW ACTS EVERY WEEK. Click now to receive the best trading ideas dailyplus unlimited access to advanced tools and strategies to gain an edge in the markets.
Want to receive Benzinga’s latest stock analysis?
This article Suze Orman Doesn’t Waste Money on Insurance for Her Condo – ‘I’m Not Paying $28,000 a Year If the Insurer Is Likely to Dispute Every Claim’ originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
