The Beatles sang about this group of morons in Washington DC: The Fools on the hill. These short term extentions are disruptive. Revise and reform for the long term once and for all.
The question MGD is whether the Insurance Industry is strong enough to absorb losses on a big flood like what happens to the Mississippi and its tributaries from time to time. Markets have a hard time with windstorm as it is. I don’t think the reserves are there for a massive flood. Perhaps the markets could form a large pool to handle it, but who knows. The NFIP has been a joke from inception and politicians have screwed it up worse over the years.
Fire is random, flood is a certainty, the only people who buy flood are those in a flood zone. The only way to provide flood is have it every policy. Flood is adverse selection and no spread of risk. You just can’t get enough rate. I lived in a flood zone for 15 years and we had one loss for $80,000. So my policy should cost around $6,000 @ year. If you live in flood zone it’s not if you will have a flood but when
This is NUTS! Figure it out already! We need a long term solution, not only for agents who understand what this disruption means but for the homeowners who need the coverage!
When we have a government not having a budget for 3 years and living on continuing resolutions, this is what you get. They want to keep the unbelievable deficits from the American People so we don’t throw them out on the street. Many will be thrown out in the next election and replaced by fiscally responsible representatives/Senators. Enough is enough.
So you want these people to solve the problem.?? Flood is not an insurable risk as a standalone product, no spread of risk not enough rate. The only way is to charge every homeowners policy and make it a covered peril. But insurance is state regulated and the low risk states will not allow their residence subsidize Fl. La. etc.
If I were living in Utah, Nevada, Arizona, I don’t think I would want my Homeowners being charged for Flood to subsidize Louisiana, Texas, Mississippi, Alabama or Florida. It is bad enough that the carriers take rate because of storms that happen in other states and build it in to my state’s rates.
But the irony of your statement is the antithesis of insurance 101. spread of risk. Read Ben Franklins history regarding the Green tree insurance company.
Tell me JW, is Obamacare spread of risk when they force or mandate that everyone have it and will be fined or taxed if they don’t get it? I have been around long enough to understand spread of risk in the P&C business and companies have everything down to a science with the number of roofs they want to have in a particular area and obviously they don’t want to write much business in the higher risk areas. The Tier 1 & 2 areas of Texas cannot get coverage for Wind and homeowners are forced into the Texas Windstorm Plan for coverage at very high rates. I have a problem with people who have their beach front homes/cabins who get them wiped out periodically and just go back and build them again on our dime. They should pay a very healthy premium if they want to keep them there.
May 16, 2012 at 4:02 pm
JW says:
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Flood Insurance is about protecting the banks who lend money to develop these disaster prone areas. The voluntary market won’t touch these areas so the bankers lobbied the gov to provide insurance.
The Beatles sang about this group of morons in Washington DC: The Fools on the hill. These short term extentions are disruptive. Revise and reform for the long term once and for all.
I agree. I do think though that there is a better way to deal with the flood, and make it a true insurance program leaving the government out of it.
The question MGD is whether the Insurance Industry is strong enough to absorb losses on a big flood like what happens to the Mississippi and its tributaries from time to time. Markets have a hard time with windstorm as it is. I don’t think the reserves are there for a massive flood. Perhaps the markets could form a large pool to handle it, but who knows. The NFIP has been a joke from inception and politicians have screwed it up worse over the years.
Fire is random, flood is a certainty, the only people who buy flood are those in a flood zone. The only way to provide flood is have it every policy. Flood is adverse selection and no spread of risk. You just can’t get enough rate. I lived in a flood zone for 15 years and we had one loss for $80,000. So my policy should cost around $6,000 @ year. If you live in flood zone it’s not if you will have a flood but when
This is NUTS! Figure it out already! We need a long term solution, not only for agents who understand what this disruption means but for the homeowners who need the coverage!
When we have a government not having a budget for 3 years and living on continuing resolutions, this is what you get. They want to keep the unbelievable deficits from the American People so we don’t throw them out on the street. Many will be thrown out in the next election and replaced by fiscally responsible representatives/Senators. Enough is enough.
So you want these people to solve the problem.?? Flood is not an insurable risk as a standalone product, no spread of risk not enough rate. The only way is to charge every homeowners policy and make it a covered peril. But insurance is state regulated and the low risk states will not allow their residence subsidize Fl. La. etc.
If I were living in Utah, Nevada, Arizona, I don’t think I would want my Homeowners being charged for Flood to subsidize Louisiana, Texas, Mississippi, Alabama or Florida. It is bad enough that the carriers take rate because of storms that happen in other states and build it in to my state’s rates.
But the irony of your statement is the antithesis of insurance 101. spread of risk. Read Ben Franklins history regarding the Green tree insurance company.
Tell me JW, is Obamacare spread of risk when they force or mandate that everyone have it and will be fined or taxed if they don’t get it? I have been around long enough to understand spread of risk in the P&C business and companies have everything down to a science with the number of roofs they want to have in a particular area and obviously they don’t want to write much business in the higher risk areas. The Tier 1 & 2 areas of Texas cannot get coverage for Wind and homeowners are forced into the Texas Windstorm Plan for coverage at very high rates. I have a problem with people who have their beach front homes/cabins who get them wiped out periodically and just go back and build them again on our dime. They should pay a very healthy premium if they want to keep them there.
Flood Insurance is about protecting the banks who lend money to develop these disaster prone areas. The voluntary market won’t touch these areas so the bankers lobbied the gov to provide insurance.