Another Joy of Owning a Home in Los Angeles

(Flickr photo by Rev Dan Catt.)

The annual letter from the bank that holds our mortgage, worried that our hazard insurance policy is far below the actual mortgage:

A recent review of your hazard insurance policy has created a concern regarding one of the most essential aspects of your policy. Our records indicate that the current dwelling coverage provided by your policy may not adequately protect the investment in your home.

While the current principal balance on your loan is [crazy, large amount -- think L.A. median home price], our records show that the dwelling coverage of your policy is [a little more than half the loan]. This coverage amount may not be sufficient to protect your home against damage or catastrophic loss.

Our bank's concern is so cute. As if it would actually cost the price of our mortgage to rebuild. Hell, for the cost of our mortgage, we could probably build a mansion.

But the return address of our bank's "Hazard Insurance Processing Center" shows that they're in Ohio -- where home prices are a tad more, well, normal. Out here in Southern California, we're paying for the land underneath our house. And that land isn't going to disappear in the event of a fire.

I called the bank to tell them as such -- and they admitted they send a lot of these letters to Southern California homes. They also told me to get used to the letters -- they'll continue to come each year whenever our hazard insurance is renewed.