Home insurance and catastrophic weather

Some people think panders are those black and white cuddly bear things that eat bamboo and refuse to have sex. Not surprising, then, that they're dying out but, hey, if we were kept in zoos and only given bamboo to eat I guess we'd give up sex as well. But actually the verb to pander is all about giving people the satisfaction they crave. In most cases, it refers to pimping but politicians do it as well, promising voters whatever they want to hear to get their votes. As an example, let's go way down south to Florida, the state most associated with sunshine and hurricanes. Alex Sink is just leaving office as the State's Chief FInancial Officer. She recently failed in her bid to be elected Governor despite running a campaign that promised to even out the inequality in the insurance market.

The story is a simple one. Here we have all these folk living on the coast. They are the lemmings of Florida, sitting there waiting for the hurricanes to sweep across the Gulf and wash them out to sea. All the sensible folk live up in the nooks and crannies of the land, hiding away from the mad winds and torrential rain that might otherwise destroy their homes. But what happens when the insurance premium rates are calculated. All the prudent folk pay the same as the unwise. That, Ms Sink claims, is just so unfair. Something has to be done! Immediately she gets into office, the State lawmakers will all see the mote in Florida's eye and pluck it out! No more inequality with the wise subsidizing the foolish. Those who want to live in the path of death-by-weather must pay the true price of insurance, while those who dig holes in the ground and wait for the storm to pass safely overhead will be rewarded with rock-bottom premium rates.

For the record, there's an estimate that the country folk are subsidizing the seasiders by between 40 and 50%. The political campaign was, in part, a reaction to then Governor Crist's veto of a property insurance bill that was intended to cap premium increases. No matter whether this was sensible, Sink's campaign promise makes to sense at all. Insurance works by dividing the expected losses among as many people as possible. If the only people sharing the risk are the ones at risk, they are self-insuring, i.e. they don't benefit from the policy. There must always be people in the group who have different levels of risk. It's the same with auto insurance. All the good drivers who never have an accident subsidize all the bad drivers who leave a pile of wreckage in their wakes.

So, all you home owners and renters, no more panders for you. Get into the biggest group of people possible so you all pay the lowest possible premiums. This is really a different way of saying the largest insurers offering home insurance policies should be the cheapest. But, because corporations like their profits, they load up the premiums. So always check the home insurance quotes to find the best value for money policy.