OK, so tonight on Fox News Brit Hume

[Pete]

and his panel of starched conservatives pondered a good question; How long is the Federal Government going to doll out emergency relief money for rebuilding peoples stuff when they insist on living in areas that are garanteed to be wiped eventually?

While I feel for these people and their loss, why does my tax money go to pay/augment/subsidize rebuilding someones home when they insist on living a stones throw from the beach in a hurricane zone or on the side of a mudslide prone hill or smack dab ontop of the San Adreas fault or in a flood zone?

I realize that some of the money is paid to "tide" them over until private insurance catches up, then it is paid back BUT a bunch of it is grants that is never paid back. One would think that a logical person would not place their entire existance in peril by building in a danger zone, and if they did the honus should be on them to privately insure themselves appropriately and not wait for the hand wringing, sympathy oozing government to make it all better when they built a half million dollar stick house in hurricane alley.

 

[Bogart]

I agree. No one should insure these morons and we should not subsidize their idyllic life on the waterfront. #### 'em.

 

[Christy]

One would think they would be unable to acquire insurance once your area was determined to be in a flood zone. I know where I grew up, half the town was wiped out by a flood and it's pretty much a ghost town now because even with it being unlikely that a flood of that proportion will hit again anytime within the next couple hundred years, the insurance companies won't give you flood insurance and the Federal gov't wouldn't back any home loans for rebuilding in a "flood zone". :shrug:

 

[Pete]

I agree. No one should insure these morons and we should not subsidize their idyllic life on the waterfront. #### 'em.

It just seems to me that emergency relief should be reserved for occurances that are not expected, a dam breaking suddenly, a freak ice storm, asteroid impact, and things like that. No one can stand on the beach in Gulfport Mississippi and say "Insurance, nah wont need it, a hurricane will never hit us here."

 

[soul4sale]

No one can stand on the beach in Gulfport Mississippi and say "Insurance, nah wont need it, a hurricane will never hit us here."

In principle, I agree with you. And the feds have scaled back their disaster relief armada in the last decade (contrast Plainfield, Ill. tornado relief with La Plata, Md. tornado relief). Much of what used to be direct grants now finances low-interest loans. No idea how many of those loans are paid back.

Problems arise, however, when the danger zones that no one wants to ensure become economic necessity. Tornado alley also happens to be our bread basket. Quake-ridden San Fran is one of our biggest cargo ports, for good or ill. Gulfport happens to be where we bring in a lot of oil (and the leisure class it pays for).

Guess they call them as they see them.

 

[vraiblonde]

Chris Core was talking about this tonight on WMAL. I caught a few minutes of it on my way home from work.

If someone is uninsured when a natural disaster destroys their home, I don't mind my tax bucks going to help them out. It's my understanding that you MUST have insurance if the bank still owns part of your home, but for people who are renting and now have no place to go, and they probably don't even have a job anymore because that got blown away too, I don't mind kicking in.

I think a lot of that money goes to rebuilding stuff other than homes, like office buildings or what have you - doesn't it?

 

[SamSpade]

You mean, like the schmucks in LaPlata some time ago who got wasted by a tornado? Or any of the other idiots who decided to build homes in our own little tornado alley?

People can LIVE in some of these 'danger' areas for generations without serious damage to their homes - else, the entire state of Florida would have been erased by hurricanes, all of the plains states wiped clean by tornadoes, the entire Mississippi river watershed inundated by floods, the mountain states crushed by avalanches and all of California obliterated by mud slides, fires and earthquakes.

As devastating as they can be, it doesn't happen to everyone. It's almost always fairly local in the devastation - it's like being afraid to ever venture outside in a thunderstorm for fear of being hit by lightning. Fat chance.

Have you ever had a relative, who doesn't live in Southern Maryland, call or leave a message, worried that a tornado coming through the area, or even say, a huge traffic accident - and they were afraid YOU were in danger? And you tell them "MOM - that was in Waldorf - it's a friggin' hour away from me! Do I call YOU if a tornado hits *Delaware*?". Since it's unfamiliar to us, we just assume if there's a flood in Iowa or a fire in Arizona - it's just down the block from where our friends are.
Many of these regions haven't been seriously hit by a storm or flood in forty years - hence, the damage and lack of disaster planning. Years ago when I lived in Wilkes-Barre - which is most in a river flood plain - no one really thought a flood like the one Tropical Storm Agnes brought would cause the river to crest at 44 feet. Because even though it's a "flood plain", it hadn't flooded in generations. That was over thirty years ago, and it hasn't flooded since.

To cast a wide net and suggest that no one be bailed out for living on a potential powder keg is to overblow the magnitude of the problem, and basically make most of the country too dangerous to ever live in.

Although admittedly, I can never understand why people build those houses in California on the sides of hills.

 

[Kain99]

To cast a wide net and suggest that no one be bailed out for living on a potential powder keg is to overblow the magnitude of the problem, and basically make most of the country too dangerous to ever live in.

 

[Larry Gude]

You people are cheap asses...

...they're guessing this thing will cost insurers (meaning claims by those who bought insurance) will be something like $25 billion.

If that money game from the feds, from us, and it does not, it would cost about $250 per household (100 million households in the US) but only about 1/2 of federal money comes from individual taxpayers, cutting it to $125 per and on top of that we have progressive rates where we might be looking at what, $60, from each home.

That's what it would cost if those folks had NO insurance and we just totally bailed them out.

FEMA, Federal Emergency Management Agency, there total budget in 2003?

$6 billion. That's $60 of your federal dollars for all of 2003, per household.

What does the nation lose with the Gulf region out of business, each day? Lost gas, oil, manufacturing, tourism, business travel, airline interuptions, simple local economy and lost payroll taxes while people are out of work?

This will be the biggest hurricane claim in US history, surpasing Andrew and claims will be paid and the feds will help with relief and infrastructure stuff and all will be well.

Losses from the four hurricanes last fall cost about this much ($22 billion) and nearly wiped out Allstates 3rd quarter earnings.

How would you like to be in a position that a major disaster or a series of smallers ones, things that just don't and won't happen all that often, merely mess up your 3rd quarter?

Lotta people have insurance and are taking car of their responsibilities.

 

[Bruzilla]

I'm with Larry on this one. Doo-doo happens sometimes, and I think it's a good use of money to help them out. What elese are we going to do with the cash? Send it to the Palestinians for their AK-47s for Food program?

My beef is with the insurance companies like Allstate, who bailed out of most of Florida as a result of last year's storms. Sure they lost money, a lot of money, but that's what they're in business to do. Anyone can offer insurance when things are just peachy, but to take premiums during the good times, then cut and run when you lose money, isn't right in my book. Insurance has always been a gamble for people because they're paying whether anything goes wrong or not, yet some insurance companies feel that they aren't required to gamble their money, aka our premiums, if there's any risk they might lose profits.

Maybe it's time to expand the federal flood insurance program to general property insurance, allowing all of us to share the risk of our neighbors across town or across the country, for a whole lot less than we're paying now... and then we can sit back and hear the insurance companies screaming about fairness for a change. If we're going to have to pay to rebuild these areas anyway, why not create a pay-in program so that you're covered for a lower rate?

 

[Pete]

I was not talking about the types of disasters like the LaPlata tornado. form what I understand tornado's of that type are truly random and not predictable.

I also am not thinking of withdrawing the population back 100 miles form the coast and blocking off Nebraska and Kansas either. I think I have visions of Mr. Knucklehead under insuring his house, building it smack dab in the hurricane hyway and coming back 3 or 4 times to the money hopper to rebuild.

Insurance companies are the anti-Christ. I like Bruzilla's idea even though I oppose government involvement in what should be private enterprise. Even the rumor that homeowners and disaster insurance would be taken over by the government would cause many an insurance exec to soil himself. They sell insurance until some occurance happens and their bottom line in crimped then they jack the rates so high noone can afford it or the bail totally.

 

[Larry Gude]

That way lies...

Maybe it's time to expand the federal flood insurance program to general property insurance, allowing all of us to share the risk of our neighbors across town or across the country, for a whole lot less than we're paying now

...a better, free-er society.

We require that you insure your car as you can do more damage than you can afford to pay for.

Why not require that we maintain home owners insurance, even if your home is paid off? You're destitution is a threat to society if your home is destroyed.

Why not require that we maintain life insurance and disability insurance?

The whole idea of insurance is to spread the risk of a fairly unlikely yet very expensive event, fire, hurricane, death, disabilty, over a large enough pool of risk-ees, if you will, so that when something does happen the pool of resources can withstand it and everyone else can sleep at night.

 

[Larry Gude]

Horeshit...

Insurance companies are the anti-Christ.

Most of us cannot afford to rebuild our house if it burns down. If 200,000 of us put up a dollar a year and only 1 out of 200,000 houses burns down per year, that 1 guy can rebuild.

Insurance is the only way an economy can move. A person can't afford the risk of putting up a building or building a plane. People can.

Insurance companies are simply the entity that handles the details.

 

[Larry Gude]

Insurance companies are not perfect...

They sell insurance until some occurance happens and their bottom line in crimped then they jack the rates so high noone can afford it or the bail totally.

..and they are in business to make money first and foremost. It takes an immense entity to be able to come up with $25 billion, right now.

In some cases, like Allstate, they aren't big enough to handle a large hurricane and they get out of the market when they get stung.

Either someone will come along big enough to handle a hurricane or perhaps there is room for the feds when wer'e talking about such a huge, and rare, occurance.

Imagine what's gonna happen when the really big one REALLY ####s up California.

 

[Pete]

..and they are in business to make money first and foremost. It takes an immense entity to be able to come up with $25 billion, right now.

In some cases, like Allstate, they aren't big enough to handle a large hurricane and they get out of the market when they get stung.

Either someone will come along big enough to handle a hurricane or perhaps there is room for the feds when wer'e talking about such a huge, and rare, occurance.

Imagine what's gonna happen when the really big one REALLY ####s up California.

Which way is it? did it devastate the company or did it merely mess up their 3rd quarter profits?

Insurance companies also have reinsurance to protect them from catastrophe's such as this. Insurance companies for insurance companies if you will.

So what you are saying is that insurance companies should be able to charge premiums, jack those premiums if you dare make a claim, only in the safest of areas and the government is left insuring the dangerous risk prone areas?

I am rethinking my opinion of emergency relief based on this discussion. Perhaps a risk ratio where the insurance companies underwrite a portion of catastrophic loss and the government underwrites part.

 

[remaxrealtor]

One would think that a logical person would not place their entire existance in peril by building in a danger zone, and if they did the honus should be on them to privately insure themselves appropriately and not wait for the hand wringing, sympathy oozing government to make it all better when they built a half million dollar stick house in hurricane alley.[/QUOTE]

When we lost Oakwood in Isabel, we made the decision not to accept any FEMA $, we didn't even apply for it. However, we had no flood insurance because as a small business owner, there was no way to afford an additional $12,000. a year policy on top of fire, liability, etc. We folded the business, took a rowboat in and got what little we could out and waited 2 YEARS for insurance to figure a way around every point of our policy. Out of the $150,000 coverage policy we paid for for 3 years ($6000) a year, we received under $18,000.00, in essence, less than we hade actually paid in.

What made us sick were the people who had not suffered severe losses, who took federal help and are now living in far nicer homes than they had before the storm. Just like in most cases where government subsidy is involved, the problem is the people who take ADVANTAGE.

 

[Bruzilla]

Most of us cannot afford to rebuild our house if it burns down. If 200,000 of us put up a dollar a year and only 1 out of 200,000 houses burns down per year, that 1 guy can rebuild.

Ehhh... not quite. Let's say that 200,000 of us put up that buck (just like the one you'll soon owe me), and one house burns down, costing say $150,000 to rebuild. We have all shared in the risk, and the insurance company has made $50,000. Now let's do it again next year, and the year after that, and the year after that, and no one's house burns down. The insurance company has now made $650,000. Now let's say in year five three houses burn down, costing $150,000 each to rebuild. Counting the year five premiums, the insurance company has brought in $100,000 over five years, paid out $600,000, and made $400,000. Not too bad.

But, in the real World, the insurance company decides that the $400,000 it made is not enough, so now they want all of us to pay $3 a year since three houses burned down and now their profits are taking a hit, not that they're going broke... just because they're not making as much money. The insurance companies are more than happy to take our money when things are good, but when things go bad, they don't want to lose any money and instead they up the premiums.

Insurance companies may not be the anti-Christ, but they are the worst bookies in town.

 

[Pete]

When we lost Oakwood in Isabel, we made the decision not to accept any FEMA $, we didn't even apply for it. However, we had no flood insurance because as a small business owner, there was no way to afford an additional $12,000. a year policy on top of fire, liability, etc. We folded the business, took a rowboat in and got what little we could out and waited 2 YEARS for insurance to figure a way around every point of our policy. Out of the $150,000 coverage policy we paid for for 3 years ($6000) a year, we received under $18,000.00, in essence, less than we hade actually paid in.

What made us sick were the people who had not suffered severe losses, who took federal help and are now living in far nicer homes than they had before the storm. Just like in most cases where government subsidy is involved, the problem is the people who take ADVANTAGE.

This is what makes me say insurance companies are the Anti-Christ. They do not skip a beat raising your rates for a claim but will wiggle and jerk you around to keep from paying.

with the technology today you cannot tell me that these insurance companies have not factored in hurricanes and losses. I just do not believe when Andrew hit FL the CEO with a stunned look on his face stammered "Holy Crap, a hurricane! We never factored in a hurricane

 

[2ndAmendment]

..and they are in business to make money first and foremost. It takes an immense entity to be able to come up with $25 billion, right now.

Problem is corporate greed. Every for profit business is trying to make a profit. The insurance companies have a "lock"; you have to have auto insurance and if you have a mortgage, you have to have home insurance, so they can charge what they want. Insurance companies own some of the largest buildings in the world. they didn't buy those with "Cheetos".

In some cases, like Allstate, they aren't big enough to handle a large hurricane and they get out of the market when they get stung.

Either someone will come along big enough to handle a hurricane or perhaps there is room for the feds when wer'e talking about such a huge, and rare, occurance.

Most insurance companies have insurance for catastrophic losses. Loyd's of London insures the insurance companies or did. Times change and I admit, I don't keep up with the insurance industry.

Imagine what's gonna happen when the really big one REALLY ####s up California.

If the really big one happens, there will be few claims, because it is tough to make a claim on something that does not exist by someone who does not exist who's heirs were probably wiped out too.

 

[2ndAmendment]

Of course there is my favorite issue when it comes to the Federal government. Can someone please show me in the Constitution where the Federal government is given the power to do any of the FEMA stuff? Rhetorical. There is no place. It does not have the power. This is another area the Feds have no authority but have taken it anyway. FEMA is another example of FDR socialism at its best (Yes, I know FDR did not start FEMA, but he did push the U.S. far down the road to socialism.).