This was not a wholly unexpected event. As you may remember from this Autumn, they do live in a place that is impacted by forest fires. Last year my Uncle and Aunt, who live just up the road, had their canceled.
My father has always been very conscientious. The small rise on which the house sits has very few trees and the grass is always cut down several times until it stops growing of its own accord. The fire department, when they have come out, have always commented on how defensible the space is. And, as is noticed from my various month walks, a great deal of underbrush has been knocked down through the years.
But policy is not set by the fire officials or by common sense. It is set by statisticians and those who which to minimize risk and maximize profit.
The precise language: "We are unable to renew home coverage due to wildfire or brush exposure, including one or more of the following conditions on or near your property: close proximity to flammable vegetation; steep slopes that may increase the speed and intensity of wildfire; limited access and/or dead end roads that may impeded fire fighting equipment".
Translation: We might have to pay out in the event of a fire. We do not want to take the risk of doing so.
I checked - it is completely legal for them to act in this fashion. And as someone who supports the right of businesses to act in a logical fashion, I rather (in a contrary sense) support them being able to do this. At the same time, of course, I am a little bit taken aback by this provider - and the ones before - whom, for years, collected money without any claims being made - and somehow managed to raise rates every year regardless.
(This raising of rates is arbitrary and I am more than a little bitter about it. In New Home, we changed insurance providers as the company we were with raised our policy prices 10% because of a statewide natural disaster which in no way impacted us. The slightly nasty part of me thinks the only thing it impacted was their profit margin.)
There is, of course, one option which my uncle is already using: The state-sponsored insurance pool which all insurers have to support. The pricing will, I am sure, be higher (in a slight fit of vicarious enjoyment, I noted that the insurance industry was complaining that they were having to support as it was being used for more and more people like my parents, which the pool was not originally envisioned to do. The state's response was "If you do not like it, start insuring those people". I am not often a fan of state mandates, but this once they seemed to get it right).
So of course I called. The very nice woman on the other end of the phone, their regular insurance agency, was quite polite and said they would get to work on it right away. I expect something to review will come soon.
I do not have easy answers, of course. On can make a decent argument that the risk of fires is increased due to no fault of the landowners or the insurance companies but by government inefficiencies and failures to manage woodlands appropriately or to allow them to be managed appropriately (with local, state, and federal authorities and private companies all pointing fingers). And one can also look at the insurance companies, who can make rather large profits and collect rather large fees and do little yet bolt at the first sign of risk of payout. One can even blame people who build foolishly or fail to take fire precautions (This, too, happens. Just because you can build in a stand of trees does not mean you should build in a stand of trees).
Perhaps the one legitimate question out of all of this is if I am supporting governments, insurance companies, or really anyone, and they are not getting the job done, why do they exist?
There are definitely two sides to it, as you note, and insurance fraud and high risk customers are huge problems for them. They have their issues and they are very real.
ReplyDeleteBut they do collude among themselves, they fix prices, and often the courts have to get involved to get them to pay out. Years ago it got so bad up here that a couple of the judges awarded punitive damages to the victims when the insurance companies started trying to squiggle out of payouts with frivolous lawfare.
I don’t get it either, TB. These guys could be heroes, and come barging in to save the day and use the PR to expand the business and bring new customers on board and still make a profit. But the bean counters and finance guys have to try and suck every last nickel out of every single customer regardless of the circumstances... and you get stuff like this. I have seen countless beautiful deals in my career, set up and served on a silver platter that are good for everyone... and they get scuttled at the last minute because some corporate pin head figures he should make a few more points than he is. I’d tell them that they could have 20% of a good deal, or 100% of nothing. It really is amazing, the amount of damage those guys do.
I used to be a free market guy but recent events like this, and the blatant abuse by companies like the tech oligarchs and other monopolies that have set up... clearly there needs to be some govt oversight.
Glen - I completely agree and concur with the statement about insurance fraud and bad actors. It is real.
DeleteBut I will also agree that it is at least too easy for such companies to get together to make "agreements" - and frankly, the difference between being "too large to fail" and thus having a semblance of no risk to operations versus smaller companies that could fail may have as much to do with who you know and how much you donate as it does with your actual value to society.
One would think this represents a market opening for some enterprising young company - but given the risk of being sued in our ever-litigious society and the fact that there is low lying insurance fruit to be found in renter's insurance and car insurance, why would anyone take the risk?
I am beginning to wonder of economies, like representative forms of government, only work on the small scale. Yes, you can have government oversight - but too often such oversight makes things more expensive and more difficult to do business - or, you find that you doing business at the convenience of the government, not because of the market.
I think I would disagree TB. Sure, today the system isn’t working...but you have to remember that it is not being applied at all like your founding fathers would have it. Even current law only applies to the peasants. In both our countries, we used to punish wrong doers, we held our leaders to standards and codes of conduct - and all that has gone out the window in relatively recent times. There used to be anti-monopoly legislation... where did that go? In the 50’s and 60’s we worried about the lower and middle classes. Today they only matter at election time, and one could argue that is no longer the case either.
DeleteI personally believe we have a “people problem” amongst our ruling class... and that it could be corrected with a few stretched necks and perhaps the judicious application of the “JFK option” to reintroduce the idea of accountability and responsibility to our leaders. People need laws, and they need to see them work for everyone... and we don’t see that anymore.
Just my opinion... but whadda I know?
Glen, I think most of your points are fair. We do not punish wrong doers like we used to nor hold our leaders accountable. We have basically done everything we can to promote business and the "classes" that are not monied are voting fodder.
DeleteWhile I do not know that "stretched necks" is the solutions, I do think that a major dose of accountability is long overdo. The laws need to work equally, or they do not work at all.
You know plenty, Friend.
Pertinent to the last part of your post, my younger brother works for the forest service and a large portion of his time in managing woodlands to prevent destructive fires like what you see out west. As part of that they do prescribed burns on specific days when all the variables align to make it as safe as can be. The kicker is that sometimes the wind blows over residential areas. Despite seeing people die and thousands of houses burn up on the evening news, they still call up my brothers office and ream him out for hours because they can't go outside due to the smoke for three hours on a Wednesday evening, even if my brother explains to them that it is only once a year and they won't have to worry about a wildfire for perhaps years afterwards.
ReplyDeleteYour problems with the insurance company remind me of our troubles with insuring our vacation cabin against loss of fire. The insurance company we normally use wouldn't insure it because the nearest water tank that the firetrucks fill up from was 5.1 miles away which is more than the maximum of 5.0 miles. And it didn't matter that the fire trucks were parked less than 100 yards from the cabin in a rural substation building and were always topped off with water.
Ed, next time you speak to your brother please thank him for me and everyone that lives in, works in, or enjoys the woodlands. His is a critical but thankless job.
DeletePeople do not understand Nature anymore as we are incredibly disconnected from it. We see the Disney or Discovery version and have come to believe that all of our Nature encounters should be like that: crystal clear skies, green trees, and no maintenance - good heavens, many people outsource their own lawn and yard maintenance, so they have zero connection to anything outside of their window. I wish they would speak with some of the people you speak of, those who have lost family members or property in a fire that a controlled burn or controlled logging and maintenance would have resolved. But - in an ironic twist for current events - it feels much like arguing with folks about The Plague now: if you have not been impacted by it or lost friends and family to it, it is just an annoyance or inconvenience.
My sympathies on the insurance. It certainly makes one feel that the companies are really only there for their own profit, not service, if they are looking for every technicality not to do something - much like an 8 year old trying to justify why they do not need to eat their dinner vegetables because they had vegetable thin crackers for snack.
Fortunately we were able to find another company willing to insure the cabin. Our home insurance, through the same company that refused to insure that cabin as mentioned above, has always been great to work with on everything else and I've always been happy. But we haven't collected on much and as the saying goes, you don't know how good your insurance is until you go to collect.
DeleteEd, that was my experience with company my father is with: Super nice people, very responsive. And to be fair, this is not on the agent level but up the chain. But as you say (and as the reviews often say), when you have to collect is the true test of your insurance.
Delete"The slightly nasty part of me thinks the only thing it impacted was their profit margin."
ReplyDeleteThe nasty part of you is correct.
As is your statement that they are only in it for their own profit. That is true also.
Here in Louisiana, lawyers have started advertising for people with storm damage whose insurance companies may be trying to lowball payments from storm damage.
But premiums will go up across the board to cover the losses also.
Linda, this happens here and at home too - if by chance you paid attention to it, the lawsuits following the fires were tremendous, with everyone pointing fingers at everyone else, which led to (at least in California) the turning off of power at the least hint of a significant wind storm.
DeleteThe premiums going up across the board irks me the most. As I think I mentioned, we changed our car insurance when it went up one year 10% across the state for a disaster we did not suffer from.