Should These People Get Insurance?

[Luv2play]

Today I saw two different news clips on CNN about people who have lost their homes or business due to natural catastrophe and in both cases they have rebuilt or are going to rebuild in the same area and facing the same risks.

 

The first involved a couple living on the Gulf Coast who have just moved in to their house rebuilt on the same cement pad that their previous home was washed off from by Katrina. They had insurance and have got new insurance as well. Around their house, most people have not rebuilt and you can see all the empty cement pads from other homes washed away.

 

The second story involved a fire in California today that just destroyed this guy's business in Moorpark northwest of Los Angeles. In a live interview with CNN, he indicated his previous business burned down three years ago, he rebuilt, with insurance, and intends to rebuild again with his insurance.

 

Now the only reason this is of interest to me is that I have three residences which I carry insurance on and each year my insurance rates go up. I have never made a claim in over three decades of home ownership. But then, I have never owned a house on a flood plain, in a hurricane zone or a fire zone. I think if people want to live in these places, then fine. But I wish the insurance companies would just SAY NO. We all are paying for these fools who want to live in their fool's paradise! x(

[augustman]

Although connected, your rates are primarliy determined by your area. Homes in a flood plane area have to get special insurance. Just because you have never used your insurance does not mean you will not need it tomorrow. Five years ago last week, while I was away on vacation a malfunctioning timer short circuited and four hours later I received a call saying by house burned down. I was first thankful we were not home and no one was killed or injured. Second it was a once in a life time string of events that lead to the fire.

 

Given your logic, the person who has had lightening strike twice should never be allowed to play golf (story last summer about golfer who has had it happen twice to him) should we also say any home that puts up Christmas lights, should not get insurance, (#1 reason for fires in December). How about anyone who uses their kitchen, grease fires lead the list the rest of the year.

 

Accidents happen that is why insurance exists. Believe me, be thankful you have never experienced a disaster or a reason to use your insurance.

[Luv2play]

My rates are determined to some extent by the local conditions but all insurance companies in casualty insurance offload some of their risks to re-insurers and these guys have been getting hosed in recent years with the huge claims emanating in particular from high-risk areas. As their rates go up, so go up everyone's rates because that is the nature of the re-insurance business. They are global businesses.

 

Of course, we always insure against the unforeseen and hope it never happens. Can someone living in a canyon in southwest California say they can't foresee a fire happening in their neighbourhood? The same thing is happening in parts of western Canada where new developments have gone into previous wilderness areas where forest fires inevitably occur from time to time, mostly because of lightning strikes. It's nature's way of renewing the jackpine forests (which can't regenerate without the acorns being exposed to fire). People should just not build in these ares or if they do, should not get insurance, IMO.

[+ deej]

This question comes up every time there's a flood, fire, hurricane, mudslide, tornado, locusts, blizzard, earthquake, etc.

 

There is no place that is immune to natural disaster.

 

Your rates are "to some extent" determined by local conditions, but so are mine. I pay through the nose for earthquake insurance, and haven't needed it yet. Hope to God I never do!

 

Did you know there's a major fault under Memphis that hasn't had seismic activity in centuries and is due? Projections I saw said a major quake on that fault could level Manhattan.

 

So should anyone in Manhattan be allowed to get insurance?

 

Where do you draw the line? ;-)

[+ purplekow]

>Where do you draw the line? ;-)

>

Here in NJ, Seabright is a community near sealevel. Flood walls keep the ocean out. Every few years a nor'easter comes in and the houses are flooded and destroyed and when a house is rebuilt, it is more elaborate.

Seems the people in this community build to insure. They get more money the more the house is worth and so build more, betting on the sure thing that there will be an eventual storm.

I think you should be out on the third strike. Once is an accident.

Twice is coincidence. Three times is a trend and that is where it should end. No one should be able to build there or if they do it should be without insurance.

 

In Seabright, what started as a cottage industry has turned into a mansion industry.

[Guest]

You do have a point when it comes to flood insurance, because that's federally-subsidized, so taxpayers foot much of the bill. Other insurances, such as fire and earthquake, though, are set by insurers, so it's up to insurance companies to say no.

[BgMstr4u]

Insurance is certainly an issue with regard to people who insist on building and rebuilding in areas of manifest danger. But just as injurious to the rest of us is the cost of the response of government agencies to these utterly predictable emergencies. People who build in the California canyons expect fire fighters to rush to their rescue and PDQ too. Likewise people who build on the edges of crumbling cliffs, and on known flood plains. There are dams that have been built and then left largely unmaintained all over the country. Some are earthquake-vulnerable, including one poised to go in eastern Orange County which could take out tens of thousands of homes built in its path should the water break free and seek the sea. There's a terrorist target for you. The list can go on and on. Every one of these events costs millions. The people affected will all expect to be rescued and their properties to be rebuilt, at public expense.

 

I am no defender of FEMA and the federal response to Katrina, but how long did the scientists warn about the levees in New Orleans and nothing effective was done by the authorities at any level, let alone by the people who lived there? God forbid that anybody should themselves take responsibility for living in dangerous places, especially when the rest of us have to pick up the pieces. The blame-everybody-else game that has reached its highest level of perfection in Louisiana is easy to play when other people are paying the bills. As my grandfather might have said, Why didn't the damn fools just pick up and move once they knew something would happen? But of course the answer is obvious: ignorance and inertia will win out every time, especially when abetted by shortsighted and venal politicians.

[+ Charlie]

On the other hand, places like New Orleans have been there for a very long time, and those whose families have always lived there, or work there because that's where the jobs are, can't really be blamed for not saying to themselves, "Well, there is a possibility that something bad might happen here, so I'll just move somewhere else." As deej pointed out, there are potential natural disasters in most of the USA--should we empty all the states between the Appalachians and the Rockies because killer tornadoes follow unpredictable paths throughout the area every year? Should California move the state capital because the city of Sacramento will suffer serious flooding if the levees break? (And where in California could you move it, that would have no danger of flood, fire, earthquake or tsunami?) I used to be smug about living in Philadelphia, which is virtually free of serious natural threats, but there is a potential for an earthquake, although most residents don't know it, and a mini-tornado knocked down part of a building near my downtown house several years ago. I don't feel much sympathy for people who deliberately build a home where they know there is a very high probability of destruction by fire or flood, and I grumble at their expectation of salvation and restoration at tapayers' cost, but I think the majority of people in this country who lose their homes to natural disasters aren't in that category of egregious risk-takers.