The Insurance Casino
Winner, Winner... Don't let the door hit you on the way out.
Do you remember playing Musical Chairs back in school when getting your feelings hurt was still allowed? Yeah? Me, too. Although I’m usually pretty good at thinking a few moves ahead of the crowd, I also got left standing more than once without a chair. It felt bad.
Speaking metaphorically, I’m not eager to find myself without a chair - especially when the stakes are higher than flushed cheeks and a little embarrassment. With natural disasters (which are anything but natural) occurring everywhere now, it’s a good time to make sure you’re sitting in a solid chair.
I started thinking about musical chairs a couple months ago when we were faced, yet again, with another wildfire. Although it was classified as a “wildfire” it was actually caused (or so we’ve been told) by someone working with an angle grinder on a too hot, too dry, too windy day. It began suddenly with a spark and spread, well, like wildfire.
All told, the fire burned over 16,000 acres in the US and reached well into Canada. At it’s peak, it came to within two miles of our home. We evacuated and were displaced for over two weeks as the fire circled our mountain.
Brooding in the hotel room gave us a lot of time to look at homes for sale on Zillow and Redfin. Just in case…
Anyone who reads my blog knows that about once a year I do this anyway, usually in August. I get discouraged with life and start wondering what it would be like to live someplace else - someplace greener and with more water. Whether it’s the grasshopper infestation eating my garden or the constant wildfire smoke, my buttons get pushed to the limit and I start to bail, at least mentally, on this adventure on which we’ve embarked.
In truth, I sulk. And then I get over it.
I’m not bailing on the off-grid part. The off-grid part is an essential response to everything I am sure is happening in this world. That’s non-negotiable. I bail (mentally) on this particular location.
A bird’s eye view makes what I’m saying sound crazy. I realize that. But hear me out.
We live in a very beautiful area, as you can see. It’s remote (very remote), which is what we wanted, and the land is highly affordable - for good reason: life is harsh here. Sometimes it feels as if nature itself doesn’t want us to stay, especially in July and August when everything dries to dust around us. The greens of spring turn to brittle, dried grasses resembling matchsticks and even the animals scurry away to chase water. Everything leaves, except the grasshoppers. The grasshoppers stay and multiply. Everything else dies and crumbles.
This hellacious period lasts until late September when, finally, the rains begin and the grasshoppers start to die off. Rejoicing, we find their little dead carcasses everywhere soon after the evenings turn cold. “We’ve done it again! We’ve made it through another summer!”, we say to ourselves while stacking the five cords of firewood we’ll need to get through the next season.
This life is not for wussies.
I’m not complaining about the work. I’m used to working on something all the time and I actually prefer to stay busy. The angst comes in feeling that all of your work could be so easily - and so quickly - undone by circumstances outside your control.
Evacuating for the fire last August hit me particularly hard. We made several trips packing valuables out - so much that we rented a storage space in town. I even moved my Ball Jars (full Ball jars), which was highly stressful. To appreciate the anxiety of moving those glass jars you’d need to drive up our road, which is little more than a dry creek bed - only the rocks aren’t smooth.
Miraculously, none of my jars broke or even cracked - which is more than I can say for me.
Between packing up, moving out and moving back in, we lost serious time in the garden, not to mention other projects we had on our list. We lost money, too, paying for hotel rooms, boarding the dogs and eating out. More importantly, we lost initiative. We felt exhausted, depleted and defeated.
Going back to the musical chairs analogy, we had to ask ourselves, If this cycle repeats every summer, is this a chair we want to stay in? Can we grow the food we need like this, being evacuated for weeks at a time? And how long do we have until our insurance company stops covering homes in our “high risk” area? (I’m sure you’ve noticed this latest trend in insurance.)
For anyone new here, we already lost a home to a wildfire in 2020. The fire began early one afternoon and, by evening, everything was gone. It was fast and intense. A total loss, the 2020 fire wiped clean a vast swath of mountainside, leaving nothing but smoking pits where trees had stood, melted glass and blue plastic.
If you’re curious about the odd nature of some of the recent fires of late, you might want to investigate the “blue plastic” phenomena for yourself. Look into Project BlueRoof and research done by Ole Dammegard. That’s your homework assignment.
The dangers of fire are all too real for us, as is the importance of having insurance. So, when we started browsing Zillow in that hotel room, it was with intent.
Never ones to sit and ponder excessively, we soon had our home on the market with a local realtor. The realtor warned us upfront that finding a buyer who could cover the cost of home insurance in our high-risk region might be an issue.
She told us about a recent incident in which the buyer, who had their financing approved by the bank, had to back out at closing. The bank waited until the last minute to ensure the buyer’s mortgage insurance was in place. Because the home was determined to be in a “high-risk area”, the buyers were forced to purchase high-priced insurance which pushed their financing over the limit for which they were approved. In short, at the last minute the deal fell through. She said this was happening more and more often.
Wow. The insurance window was closing faster than we had anticipated.
With that in mind, a list of homes favorited on Redfin, and some realtor appointments made, John and I set off on an adventure to look for a new home. We spent a week driving across the country, all the way to Michigan where there is certainly more water.
Driving east, we witnessed the gas prices drop from $5.50 per gallon in WA all the way down to $3.41 in MI. Likewise, we noticed that while a cord of firewood in WA sells for $250, that same amount of wood in MI is only $75!
Moving was looking smarter with every mile…
I should mention that we had our reservations and fears, too, about the decision to leave this place. We didn’t just jump in the car and go. For weeks we weighed so many options, like buying on grid. Buying an on grid home and transitioning it off grid can be complicated. Some areas have regulations that make the transition very difficult, as the power lines are already connected to the house and the power bill may include services and taxes that are not negotiable. More often than not, areas also require permits for any work that impacts a home’s infrastructure, including solar panels. Did we want to deal with that?
We also couldn’t ignore the latest wave of Covid they’re reinventing. Would we be stuck moving in the middle of a lockdown (again)? Would we be able to obtain all the supplies we need to rebuild our solar system if the supply chain fails (again)? Could we establish a garden in that region’s soil? What would it feel like to go from 60 acres of nothingness to 5-10 acres with neighbors? The horror!
Just thinking about re-doing all that we’ve done here over the past three years was overwhelming. Over the course of weeks, we’d discuss it all, decide to move and then vacillate into staying, overcome with the reality of everything yet to be done.
All this as the stench of smoke hung in the air around us from the latest fire.
Finally, the question of insurance tipped the scales for us. We decided that moving and having insurance in a low-risk area was better than staying in a high-risk area where our insurance would inevitably be cancelled. After all, we’re realists. The lifestyle we’ve chosen is different from most, but not because we’re ignorant of how society works. If our home were to be destroyed and we weren’t covered by insurance… well, what then? We’re too old to be starting over.
Then, too, knowing what we know about “Climate Change” and 15-Minute Cities, were we just kicking the can down the road? When, ultimately, the goal is to force every household into controllable areas as the global pinchers tighten, were we just postponing the inevitable by moving? Were we running from a fight we’ll have to face eventually, no matter where we go?
Moving is serious business and we prayed a lot. Trying to read the signs and do the right thing, we prayed for an unmistakable, impossible-to-misread sign from God that we - even we in our rush to do and go - could not miss.
And then we found the cutest little rock house in Michigan. I fell in love immediately with the ivy-covered stone walls, the cottage gardens and towering hardwood trees - not to mention the river that flowed on two sides of the property!
We signed the papers and put down our earnest money, then we drove home and waited for our home to sell. Physically and mentally, we were prepared to move.
Like we do, we had a list of next steps. I asked John to call our insurance company to see what the premium would be on the new house. Thinking it was premature for wanting to call them now, before we even closed, he rolled his eyes. Good husband that he is, he humored me anyway and called them. It’s a good thing he did.
Normally, you don’t worry about whether you can get insurance on a car or a house - it’s been a given in our culture for so long. Apparently, though, it’s time to think again.
At first, the customer service agent took down all the regular information. She came back with a quote that was about half what we’re paying now. Wonderful! Things were looking good.
Then, a few minutes later, she called back. “I’m sorry but the underwriter is refusing to cover you.”
Shocked, John asked, “What? Why? They cover us now and we’re in a high risk area.”
“They won’t do it. They will not write any new policy for you because of previous claims.”
“So they’re covering me now in a high fire risk area, but if I move to a low risk area, they won’t write me a new policy? Even though the risk would be lower?”
“Yes, sir. That’s correct.”
The conversation continued with nothing changing. John called a couple more insurance companies over the next few days only to confirm that we - not our house, but we - are now uninsurable. Why? Because we actually used our insurance. Once.
You use it, you lose it. Apparently, that’s the rule.
I thought about all the people I’d seen on the news who had suffered hurricanes and tornadoes and stayed in the area, uninsured. I remembered how I had jeered at them for being willfully unprepared, or so I had imagined in my ignorance.
Now I know better.
It was a humbling lesson because now we are those people. Ironically, we can’t move out of a high risk area because we’d lose our insurance. And, if we did move (assuming someone else could buy our home and afford to insure it), no insurance company will write us a new policy. So we’re stuck.
Not a bad place to be stuck, actually, but stuck nonetheless.
So how does this affect you? If you’re in a high-risk area (fire, hurricane, tornado, flood, etc.), you might not be able to move because your buyer might not be able to get insurance on the house if they’re financing. So what if they pay cash? Well, who would spend money on a house they can’t insure? That’s a bad risk.
Now, consider how many areas are now becoming “high-risk” due to “climate change”.
Can you see where this is going?
Insurance companies’ change in policies is going to impact the real estate market. In turn, the overall economy will be affected dramatically. A large sect of the economy depends on funds and labor generated by people moving. Think about the last time you moved. How much did you spend on movers/haulers, remodeling, sales tax, permits and construction, small home repairs, etc.?
Insurance companies have just put a giant stick in the wheel of the economic machine. It’s going to take time to see the effects but, wait for it…
Ironically, the insurance company we’re with now is renewing our policy, they just won’t write any new policies for us so we’re taking it year by year. The day may come when no one will cover us in our “high risk area”, and we expect that. When that happens, we’ll redirect the money we’re paying for insurance into bolstering our own fire protection system. That’s about all we can do.
I share this because I have a feeling everyone will be in this position, or a similar one, sooner or later. People who haven’t gone through it may scoff (like I once did) at those who stay in these high-risk areas, thinking a smarter person would move. If it were them, they’d get out. Sell it and go. But the reality is far more complicated, as you see.
Insurance companies are working in lock-step to force people out of their homes through increased premiums or outright denial of coverage. We own our home, so we have the choice to stay here uninsured when it comes to that, but anyone who has a mortgage will not have that choice. Their insurance premium will go up until their mortgage becomes unaffordable.
You’ll own nothing and you’ll be happy.
And before anyone asks, we did look into the Fair Plan, which is a government subsidized insurance plan. That plan covers only the house structure and the premium is extremely high. Basically, the Fair Plan exists to cover the bank’s back - not yours.
So our question of moving is now off the table. I can stop browsing Zillow forever and settle into dealing with grasshoppers and wildfires as a permanent feature of my life. Maybe I’ll even learn to see them differently now, with more acceptance.
We asked God for an unmistakable sign and I suppose we got it, although it wasn’t what we were expecting. Despite the fires and grasshoppers and come-what-may, I am at peace with staying here. I trust God and his infinite wisdom, realizing how many times I’ve been wrong in life and how many times He has saved me from myself and my short-sighted plans.
Would moving have meant jumping from the frying pan into the fire? Maybe. Would a home in MI have been a less stable chair, so to speak, than this home in WA? Would the music have stopped playing midway between WA and MI and left us stranded in a power-outage along I-90 in a U-Haul? Who knows. I guess we’ll never know.
For now and the foreseeable future, I suppose I’ll continue to pray for the best, keep my fireline clear, and settle my butt firmly in this somewhat splintery, dry-as-a-matchstick chair I call home.
There’s no place like it.