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Should the taxpayer fund insurance for those on flood plains?
Comments
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Graham_Devon wrote: »It's a good point, but where does it stop?
Should the government be paying out for eeryone who is hit by an uninsured driver?
Should the government be paying out 70% of the premium of a younger driver, due to their higher risk putting their prices up?
Where does it stop? And like the private companies suggest, do these sorts of things only apply when the value of something we own falls, but we get to keep every penny if the value is increased by something?
It is sometimes difficult to draw a line; that it true.
Sometimes the issue is so far away from the line that's it's a no brainer.
If and I say if the insurance industry withdraw insurance for hundreds of thousands of properties then it would be a no brainer.
So let me say for the 10th time I am NOT saying the taxpayer should subsidise the home owners insurance; I'm talking about the situation where the insurance industry REFUSED to insure large numbers of properties.
I'm sure some-one will hypothesis propose that the insurers will then propose premiums of say £1 m at which point I withdraw from the discussion.0 -
Graham_Devon wrote: »It's a good point, but where does it stop?
Should the government be paying out for eeryone who is hit by an uninsured driver?
No but we all (drivers)do anyway through higher premiums, which is what the ABI are advocating here they just want some help bridging the gap before they build up a fund. If they "raise" the fund themselves I presume policyholders will have to pay for the "overdraft" charges.
Should the government be paying out 70% of the premium of a younger driver, due to their higher risk putting their prices up?
No because that is a risk that can be seen, evaluated and known. Many of these flood victims are 1.) being hit by freak occurrences and more often than a standard risk would happen. 2.) Many are in areas where development out of control of individuals has heightened the risk. For instance would a ploughed field hold and buffer water run off more than a compacted grass and or paving/concrete/tarmac.
Where does it stop? And like the private companies suggest, do these sorts of things only apply when the value of something we own falls, but we get to keep every penny if the value is increased by something?
I certainly question how the insurers would handle any surpluses that we have allowed them to build up by this action, over and above a reasonable surplus.
AIUI the insurance companies aren't asking fro long term government funding only a bridge until they have funds in place, gained from a levy on all property insurance.
I am sure at risk properties will always pay some form of premium over standard in the same way that a thatched cottage would be loaded from a fire perspective. If insurance is always going to cost more on certain properties I am sure that this will be reflected in the price that theyw ill achieve."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Wouldn't it be easier all round to simply nationalise insurance then? Bring in a scheme such as NI (with it's original aim!) to pay for contents and buildings insurance?
I'm not too sure of what benefit this has to taxpayers. The private company get to keep the low risk and the profit that goes with it, and get to increase the premiums for those with low risk, to provide for those with a higher risk. As they say, they don't want to see a free market, so why not just nationalise it and do away with the profit taking if were going to pay as if it's nationalised anyway?
Theres no competition here. It's a group lobby.0 -
Graham_Devon wrote: »Wouldn't it be easier all round to simply nationalise insurance then? Bring in a scheme such as NI (with it's original aim!) to pay for contents and buildings insurance?
I'm not too sure of what benefit this has to taxpayers. The private company get to keep the low risk and the profit that goes with it, and get to increase the premiums for those with low risk, to provide for those with a higher risk. As they say, they don't want to see a free market, so why not just nationalise it and do away with the profit taking if were going to pay as if it's nationalised anyway?
Theres no competition here. It's a group lobby.
AIUI they are asking the government to buy them time to put a fund in place, by providing an "overdraft" that will be repaid by increased premiums for all. and affordable higher premiums still for those in higher risk.
They are really saying they don't have the reserves now to meet the claims , but they will in future ensure they are there.
They could of course ask their shareholders, short term, to stump up more capital, to meet the claims, and refuse to accept the risk at renewal (put up the premium). They are not compelled to offer insurance. I remember Lloyds Names being called upon once when they didn't expect to be.
Isn't insurance a bit like derivative trading in that they reinsure to some extent, effectively betting on each other that they won't have any claims made against them?
Private business isn't run for the benefit of the customer."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Yes I can. The answer is 'no'.
Thanks for the interesting reply.
Probably far too off topic to pursue the full meaning or the consequences of such an extreme view.
It's quite strange that there has been no discussions either here or in the general media about the consequences of truely letting banks fail and with them the punters deposits.
My own thoughts didn't get further than riots in the streets, the fall of the government and the complete fracturing of the political party in power, followed by a total reversal of the policy or total nationalisation of the banks.0 -
Lets remind us what the issue is
Because the increase in flooding, the insurance industry is saying they won't insure in those areas in the future
No they aren't. They are saying they won't insure them unless they get paid enough to justify doing it. They are asking that it is paid for by everyone paying £10 rather than by asking the at risk property owners to pay a larger amount (a few hundred £s each).
Besides which you didn't answer any of the valid questions raised. Should any house, regardless of risk of flooding be able to get subsidised insurance? If not, where should we draw the line. Why is this different to insurance risks due to crime in the local area, or insurance premiums based on age (which have nothing to do with personal behaviour).
A house that floods all the time IS worth less than one that doesn't and propping up the value just encourages exactly the kind of behaviour we should be discouraging.Having a signature removed for mentioning the removal of a previous signature. Blackwhite bellyfeel double plus good...0 -
It's quite strange that there has been no discussions either here or in the general media about the consequences of truely letting banks fail and with them the punters deposits.
My own thoughts didn't get further than riots in the streets, the fall of the government and the complete fracturing of the political party in power, followed by a total reversal of the policy or total nationalisation of the banks.
Most people would have been covered by FSCS. The government could easily have chosen to allow banks to fail, sell off their books and then, if they wished, covered losses by savers with more than the FSCS limit.
The issue with how the bank bailouts have worked in the UK and Europe is they effectively allowed extremely wealthy investors from around the globe to cash out and hand all the risk over to the various governments.
Should we have allowed any and all banks to fail? Not in my opinion, but some should have closed and others should have been significantly restructured. As it is all that's happened is we rewarded the wealthy for taking risks, taken ownership of those risks and shown them that they can do it again in future.Having a signature removed for mentioning the removal of a previous signature. Blackwhite bellyfeel double plus good...0 -
[QUOTE=N1AK;57586143
A house that floods all the time IS worth less than one that doesn't and propping up the value just encourages exactly the kind of behaviour we should be discouraging.[/QUOTE]
It is a valid point.
Perhaps insurers should simply write off the property and demolish it , a bit like an uneconomic repair on a car. That land would then be void/blacklisted as regards any future insurance cover.
No new properties should be allowed to be built in any likely flood area foreseeable in the next x years , with say a likelihood of 1/100 years."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
somethingcorporate wrote: »And what about the company that has provided the insurance for those properties that were at risk? Are they really blameless?
If those properties were uninsurable then that would be a different question, because the insurance company are finding these liabilities they have taken on are not going to be profitable I find it a bit rich them going cap in hand to the government.
Agreed, an insurance company takes on risk in return for a premium - this is what they do for a living. If they have not taken high enough premiums for the risk then that should be their problem.
Someone mentioned a drought earlier, well that is a different scenario unless someone has paid a premium to an insurance company who has underwritten the cost of supplying water on these circumstances.
I agree that we should help each other as fellow taxpayers, but to effectively absolve a corporation of their responsibilities because they screwed up would seem irresponsible and just plain wrong.
imho
J0
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