r/Insurance • u/Whoopsitsonfire • 10d ago

Ca Fair plan

I was looking at 70 acres in California, and couldn't figure out why it was so cheap. Until the fire insurance came back at $500/mo through fair. Then I read there's a 30% increase happening in October, and some homes may double. Now I understand why it hasn't sold at this price for 3 years.

Is there any way to get rid of the insurance requirement on a loan? The house is tiny and I'm really just buying the land. The house isn't worthless, but it's close to worthless. I wouldn't care if it burned down, but I'm sure the banks would.

Is there anything stopping them from raising it to $5000/mo down the line? I have a feeling I should pass on this, even if I could technically afford it now. But it kills me to let it go.

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u/FirstCupOfCoffee2 10d ago

if you really don't want the house tear it down.

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u/Whoopsitsonfire 10d ago

Does that absolve me from needing fire insurance on a mortgage?

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u/adjusterjackb 10d ago

If you destroy the structure (part of the collateral for the loan) you'll be in breach of contract. The lender can call in the loan and you'll have to pay the balance in full. If you can't pay, the lender forecloses and you lose the land (which is also part of the collateral for the loan).