As a former Director of Emergency Services, and someone who has seen a great deal of nature’s wrath, I do not understand the rationale of insurance companies. It appears to me that the reason for expecting those who have chosen to live in areas where risk is minimized, being charged increased rates to cover those who have not, is both irresponsible and designed purely for the protection of the insurance industry itself.
Within one of the former jurisdictions for which I was responsible, creating a comprehensive risk analysis for the entire jurisdiction enabled us to thoroughly analyze risk in terms of its probability of occurrence, the frequency of that occurrence and the severity of its occurrence.
I felt well aware of where it was likely that a particular risk would result, and employed resources to effectively mitigate those risks to the capability of the jurisdiction to provide resources and manpower.
What was, and is irrational, is for a jurisdiction, understanding with some certainty that a risk is high or consequential to allow citizens to then build in those areas, knowing full well that the probability of a loss is significant.
Why should policyholders underwrite risk that is excessive for a few who choose to ignore the advice and rationale for not building in a significant area?
What I found, and what angered me, as the person to be held responsible was in providing clear empirical data or projections that illustrated with clarity that rebuilding or building in a given location would likely result in recurring loss.
If insurance companies want to provide insurance to those who irrationally determine that they want to live on a known flood plain, or in a wild-land fire interface where the probability is excessively high that protection for a given occupancy cannot be afforded, then it should be incumbent on the owner of the property to provide protection himself, and that the insurance company enforce higher fees and mandate the protection systems to be incorporated into the property.
To date, I have not seen this rational approach to insurance provision.
More importantly, if insurance companies continue to escalate costs for all homeowners irrespective of risk, it is likely that climate change will either bankrupt the industry or make insurance costs so excessive that no one can afford coverage.
It’s time for both homeowners, municipalities and the insurance industry to get their heads out of their collective posteriors and face up to the reality that building in some locations should simply not be allowed, unless the homeowner signs a waiver that neither the jurisdiction nor the fire service can be held responsible for the possible, or I would suggest, probable loss.
In essence they must be self-insuring.
Leave a Reply