Comments on: Why are we paying for this? http://funny-about-money.com/2008/09/15/why-are-we-paying-for-this/ Simple Living = Frugality = Peace of Mind: Personal Finance and Stress Control Wed, 23 May 2012 08:41:13 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Mary http://funny-about-money.com/2008/09/15/why-are-we-paying-for-this/comment-page-1/#comment-1979 Mary Wed, 17 Sep 2008 01:37:39 +0000 http://funnyaboutmoney.wordpress.com/?p=1305#comment-1979 All I could think about, watching those people who did not leave, is that if my son/ husband/ father/ sister/ mother/daughter died trying to save someone who wouldn't evacuate, forgiveness would be a long time coming. All I could think about, watching those people who did not leave, is that if my son/ husband/ father/ sister/ mother/daughter died trying to save someone who wouldn’t evacuate, forgiveness would be a long time coming.

]]> By: copyeditorsdesk http://funny-about-money.com/2008/09/15/why-are-we-paying-for-this/comment-page-1/#comment-1978 copyeditorsdesk Mon, 15 Sep 2008 23:30:44 +0000 http://funnyaboutmoney.wordpress.com/?p=1305#comment-1978 I don't recall any bailouts of insurance companies, but I could be wrong. In the late 1950s, the bottom dropped out of insurance securities and people who were invested in them lost their shirts. My father was one of them; I was too young to understand what was happening, other than that he lost a lifetime of savings and it looked like I wouldn't be going to college. But he recovered, eventually. My sense is that unless you can prove you have to live in a coastal area so that you can work on an oil rig, you shouldn't be underwritten by insurance companies and the taxpayers to do so. I also have lived right on top of the San Andreas Fault. One earthquake opened a crack in a major road we could see from our front windows. However: our building was constructed so it was shored up against earthquakes, and so it sustained no damage -- not even a broken window, anywhere in its entire 13 stories. Interestingly, it was owned by an insurance company. :-D Seriously: why should everyone's insurance premiums underwrite those who live in structures that are not built to withstand earthquakes or hurricanes? Why shouldn't people who live in the middle of flammable forests bear the full freight for rebuilding when their houses burn down? Why should they be insurable at all? And absolutely: if you refuse to evacuate when you're told you're at risk, you should have to pay the full cost of the rescue operation, including the fuel to run the helicopter that hauled you out. I don’t recall any bailouts of insurance companies, but I could be wrong. In the late 1950s, the bottom dropped out of insurance securities and people who were invested in them lost their shirts. My father was one of them; I was too young to understand what was happening, other than that he lost a lifetime of savings and it looked like I wouldn’t be going to college. But he recovered, eventually.

My sense is that unless you can prove you have to live in a coastal area so that you can work on an oil rig, you shouldn’t be underwritten by insurance companies and the taxpayers to do so.

I also have lived right on top of the San Andreas Fault. One earthquake opened a crack in a major road we could see from our front windows. However: our building was constructed so it was shored up against earthquakes, and so it sustained no damage — not even a broken window, anywhere in its entire 13 stories. Interestingly, it was owned by an insurance company.
:-D

Seriously: why should everyone’s insurance premiums underwrite those who live in structures that are not built to withstand earthquakes or hurricanes? Why shouldn’t people who live in the middle of flammable forests bear the full freight for rebuilding when their houses burn down? Why should they be insurable at all? And absolutely: if you refuse to evacuate when you’re told you’re at risk, you should have to pay the full cost of the rescue operation, including the fuel to run the helicopter that hauled you out.

]]> By: !wanda http://funny-about-money.com/2008/09/15/why-are-we-paying-for-this/comment-page-1/#comment-1977 !wanda Mon, 15 Sep 2008 18:19:01 +0000 http://funnyaboutmoney.wordpress.com/?p=1305#comment-1977 If insurance worked properly, people and corporations living in high-risk areas would be paying adequate premiums already. Property insurance would be just like car insurance, where people who drive more or fall into a higher-risk group pay more, so the fact that a 16-yr-old boy in a sporty car got in a crash doesn't really affect your rates. Most of the US is in danger of some natural disaster. Many of these areas are also ones where there are great natural and other resources- aren't there oil rigs near Galveston? From the view of a person choosing to live in such an area, the risk of huge natural disasters can be outweighed by the prospect of large rewards. Also, the risk of some of these disaster events can be mitigated. Worldwide, earthquakes are quite common, so we know a lot about how to build structures that are relatively earthquake-proof. My work building survived the Loma Prieta quake with no loss of life and no major property damage, and we are still currently making seismic upgrades. We know how to mitigate the risk of fire around buildings in fire-prone areas and lessen tornado damage in tornado-prone areas. There is no need to abandon these areas as long as people are required to take adequate precautions. The problem, as you said, comes from the government has to bail people and companies out who did dumb things. If the government required people who were rescued to pay for the cost of the rescue, they would think twice before refusing to evacuate. I don't recall if the government has bailed out insurance companies, but if so that's simply dumb- insurance companies need to know that they need to charge sufficient premiums. The government also fails when it refuses to require people to take minimal precautions to reduce the damage from natural disasters and reward people who do more than the minimum. If insurance worked properly, people and corporations living in high-risk areas would be paying adequate premiums already. Property insurance would be just like car insurance, where people who drive more or fall into a higher-risk group pay more, so the fact that a 16-yr-old boy in a sporty car got in a crash doesn’t really affect your rates.

Most of the US is in danger of some natural disaster. Many of these areas are also ones where there are great natural and other resources- aren’t there oil rigs near Galveston? From the view of a person choosing to live in such an area, the risk of huge natural disasters can be outweighed by the prospect of large rewards.

Also, the risk of some of these disaster events can be mitigated. Worldwide, earthquakes are quite common, so we know a lot about how to build structures that are relatively earthquake-proof. My work building survived the Loma Prieta quake with no loss of life and no major property damage, and we are still currently making seismic upgrades. We know how to mitigate the risk of fire around buildings in fire-prone areas and lessen tornado damage in tornado-prone areas. There is no need to abandon these areas as long as people are required to take adequate precautions.

The problem, as you said, comes from the government has to bail people and companies out who did dumb things. If the government required people who were rescued to pay for the cost of the rescue, they would think twice before refusing to evacuate. I don’t recall if the government has bailed out insurance companies, but if so that’s simply dumb- insurance companies need to know that they need to charge sufficient premiums. The government also fails when it refuses to require people to take minimal precautions to reduce the damage from natural disasters and reward people who do more than the minimum.

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