Home Insurance: Democrat style

I listened to a radio interview this morning (while in the shower) and the discussion was a variation of Obamacare that is floating around Washington and blue-states.  Instead of ruining health care, this time they’re aiming at Home and property insurance.

I have to add a caveat.  I’ve been Googling the web for confirmation of various disaster insurance proposals.  There are many from institutions, the insurance industry, and from members of Congress. I haven’t been able to confirm this specific proposal.  Many of those I did find echo some of the proposals I heard during the interview.

The basic proposal is this:  when disasters strike, insurance companies are hard pressed to pay the claims and to later recover their liquid reserves.  Most often, the insurance companies recover by increasing premiums.

Some areas of the country are always at risk, such as Florida, the Gulf Coast and the eastern seaboard, for hurricanes.  The Midwest is at risk for tornadoes and floods. In California, the western seaboard, and Alaska the risk is for earthquakes.  Tsunami risk includes Hawaii and those states frequented with earthquakes. Finally there is the near-continual volcanic eruption on Hawaii’s big island.

There are few, if any, areas in the country not at disaster risk for something.

All those disasters cost the insurance companies money.  They also makes insurance premiums high in those areas. Some people choose not to have insurance due to the cost. They accept the possibility of loss.

That’s not fair, according to liberal/democrat dogma!  Something must be done!

One proposal is to equalize premium costs across the entire country.  The problem with that is that those states/areas of the country at lesser risk, end up paying higher premiums to subsidize those in high risk states.

Another proposal is to freeze premiums.  That can’t be done because, in short order, insurance companies would soon drop disaster insurance or go out of business.

The last variation is the proposal above and have the Feds (read FEMA) under-write the losses.  Once again, the tax-payers end up subsidizing the cost of insurance for those in high risk areas.

When liberals find an issue, they will always screw it up.

This is another liberal agenda that attempts to make life an ideal that does not exist.  There is no perfect world where risk does not exist.  Life isn’t fair.

If these proposals are allowed to continue, we’ll end up with another boondoggle like Obamacare.  A solution that makes the situation worse for everyone.

It’s time for the feds to leave well enough along.  The insurance business plans work.  If you choose to live in high risk areas (I live in tornado alley), you have to live with the risk and manage that risk as best fits your circumstances.  For some folks, that means doing without insurance.

It may not be pretty, but that, is reality.

4 thoughts on “Home Insurance: Democrat style

  1. If these proposals are enacted, it will do to Home/Property Insurance what Obamacare will do to health insurance—kill it.

    The result is that your only option will be from the government, heavily controlled and regulated. We've already had examples of that with the Spring floods along the Missouri River. The government created the floods then refused to allow issuance of flood insurance by back-dating the "start" of the flood.

  2. I'm not surprised. That would kill insurance. If you choose to build your house on stilts in sand on a shoreline that gets hit by a hurricane every so many years your premium SHOULD be enough to pay for replacing your neighbors homes.

    MINE, should not.

  3. Brigid, yep, it's Obamacare redux. Raise everyone's rates to cover the costs of a few. They made their choice. It's their responsibility to live by the consequences.

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