Tuesday, September 28, 2010
Housing
Congress in an effort to get the housing market moving has convened a panel to study the issue. One of the proposals that was made is to make first time home buyers buy a mandatory insurance. Not regular homeowners insurance but insurance against damage and repairs that might be considered maintenance.The idea being that an unexpected repair could put undue strain on their budgets. So at a time when homes are extremely hard to sell and new construction is almost at a standstill they want to put another impediment in the path of first time buyers. Most people who have bought a house remember how tight money was coming up with down payments and closing costs. The added expense of an insurance that is bound to be expensive or useless is libel to be the tipping point that keeps people from buying.
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This isn't as clearly a bad idea as it seems on the surface. Obviously the government compelling people to purchase the insurance is wrong. However, the insurance often referred to as a home warranty is something realtors include in a deal to ease the mind of hesitant buyers. When we bought this house a one year warranty was paid for by the sellers. We used it once or twice but decided not to renew the policy. Between the premium and the deductible I didn't think it was worth it.
ReplyDeleteThe other angle to legislation like this is the "follow the money" rule. I guarantee you the companies that sell the warranty insurance are contributing heavily to the congresscritters pushing the legislation. Just like the mandating airbags in cars. I'm sure some money helped convince congress that they were a good idea. OnStar being mandatory will be pushed in a few years as a safety feature.
Bill, The auto industry wouldn't be in the fix it's in if there weren't so many mandated safety features, pollution controls, and mileage requirements. All these mandates add to the cost of the vehicles and lessens the affordability and or the profit margin.
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