insurance companies should fund a group to prevent disasters in disaster areas.

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zacker150@reddit

Insurance companies are literally paying for private firefighters

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Sherifftruman@reddit

I heard a story about this on NPR. Some insurance companies are already doing this and did it during the recent fires.

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Professional_Ad_6299@reddit

Welp, they could make sure that people rebuild with fire proof, concrete homes in fire prone areas and houses on stilts in flood prone areas. They prefer to just run off with your premiums though

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Striking_Computer834@reddit

Crazier idea: Cancel people's insurance policies and then they'll really be motivated to clear dry weeds around their home because they can't afford to lose it.

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Impossible_Ant_881@reddit

That's not how humans calculate probabilities. A big reason insurance is a profitable industry is because people are bad at determining their actual risk profile.

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stanolshefski@reddit

Property insurers typically aim to have claims equal 95-100% of premiums and to make money by investing the reserves.

It’s actually a fairly low margin industry and some of the largest players are mutual insurers, which means that the owners are the policyholders.

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in-a-microbus@reddit

Naw...the bank will just foreclose on that case.

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This is how it actually works. Insurance says to clean up the weeds or they'll drop you. Homeowner knows that without insurance, the mortgage company will repo their house. Therefore, they clean up the weeds.

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Striking_Computer834@reddit

Banks aren't as quick to foreclose as you might think. While they own the property they are on the hook for the property taxes, maintenance, and brush clearing required by law. If it's a property that can't be insured they will only be able to sell to cash buyers.

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stanolshefski@reddit

Depending on the desirability of the property, that could significantly lower property values, which could lose the note holder even more money.

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Sanchastayswoke@reddit

Yeah but sometimes the dry brush & stuff is on public land, not the personal property

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Western-Willow-9496@reddit

And then it is the responsibility of the Fed,state or municipality who controls that public land.

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deleted_by_reddit@reddit

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ABA20011@reddit

My sister has a property in an area that is high risk for forest fires and has had nearby fires. She was dropped by her insurance company and really had to work to find another company. And yes, that other company made her move her firewood, clear some trees, and might make her replace her shingle siding. And they would be right in doing so.

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beermaker@reddit

A friend bought a home with a huge oak branch hanging over his garage... he initally told his insurance company they could either help him by paying a percentage of $5k to have it taken down, or end up springing for a $30k roof when it falls.

Guess which one they paid?

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greenskye@reddit

This feels like a good way to get dropped from your insurance

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itsbagelnotbagel@reddit

They can't drop you until after paying out, and any other home insurance company will still insure you. They just threaten dropping you in the hopes you won't file the claim

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TheBupherNinja@reddit

But there was no damage, and no claim. If you say 'there is a threat over my house, and I will let it fall and make a claim if you don't fix it' then they can drop you.

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stanolshefski@reddit

Some insurers won’t insure a house if any tree overhangs the house.

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TedW@reddit

I think they meant "drop you when you warn them you're not maintaining the branch, BEFORE it falls."

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greenskye@reddit

Exactly. You've a) warned them you have a situation that will cost them money and b) refused to pay for it yourself.

They can just say "lol no" to your 'threat' and then drop you when you don't do anything about the known potential issue.

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Improvident__lackwit@reddit

Lol exactly.

“You can either pay for safety netting around my backyard trampoline or pay the inevitable liability claim when a neighborhood kid breaks his leg….your choice!” [taps foot smugly waiting for response]

Cancellation notice in mail.

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HumanDissentipede@reddit

Never tell your insurance company about a known risk like this. That is a very good way to forfeit coverage when a branch does eventually fall on your roof, because you knew about it and didn’t take the necessary actions to prevent it.

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Uvula_Inspector@reddit

And then everyone clapped.

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sneezhousing@reddit

I had a pine tree three feet from my house when I bought it. Ieaned ever so slightly towards the house. Insurance company told me to chop it down or they would drop me

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doobydubious@reddit

Nothing, because the contractor was at fault?

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Fast-Ring9478@reddit

At fault for what? Building near branches? lol

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doobydubious@reddit

I thought it was a trick question. Insurance companies don't payout in advance

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Negative_Ad_8256@reddit

The entire southwest is desert, and all the major cities in the area use the Colorado River as their water source. There is nothing anyone can do to make Phoenix, Los Angeles, or Las Vegas sustainable.

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deleted_by_reddit@reddit

[removed]

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erroticgunguy@reddit

Like a government?

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realityinflux@reddit

Insurance companies already kind of do something like that in certain areas. The driving monitoring device that, if you use it and "drive safely," will get you a break on your rates. Also, fire insurance cost may be discounted it you have a fire extinguisher in the house. Or at least, I know they used to.

That they don't already do what you suggest might just mean that it's more cost-effective for them to simply raise rates in areas prone to fires--which is what they do. But I can imagine a discount given if a home owner can show that the low brush and other wildfire fuel is cleared around the house to a certain radius. I saw pictures of houses in Paradise CA that did not get destroyed in the fire there because the grounds around the buildings were cleared.

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Winter3377@reddit

I uninstalled the driving monitoring device because it kept pinging me for things like stopping at yellow lights and called it phone use if I had the GPS on. It's a good idea in theory, but in practice it seemed like it wanted me to entirely ignore my surroundings to drive a perfectly consistent speed.

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EldoMasterBlaster@reddit

They would probably love to do that. Unfortunately they would be arrested in California.

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TimidBerserker@reddit

What the hell does this mean?

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human743@reddit

Go start cutting plants and clearing trees in California state lands as a fire break. Your court appointed attorney will explain what it means at your arraignment.

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Puzzleheaded-Tip660@reddit

It isn’t just California, you cut trees that you don’t own anywhere you’ll end up on /r/treelaw

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human743@reddit

I promise you can go wander around in the Brooks Range and cut any tree you want and not a single person will ever find out. You might attract some grizzly bears though. There are 32 billion trees up there and very little supervision. Note that if you get hurt cutting the tree nobody will ever find your body.

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ManhattanObject@reddit

Hurr durr left state bad

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deleted_by_reddit@reddit

[removed]

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Goldnugget2@reddit

Oooo but then they won't get the pleasure of denying you you're coverage.

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Riccma02@reddit

OP is missing the point of insurance companies entirely. If they make the world less risky, then their customers won’t be willing to pay. Their entire business model is based of fear and coercion. They are basically the mob, to where you pay them protection money, but they have outsourced the responsibility of breaking your legs to Mother Nature.

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Sorryifimanass@reddit

Am I the only crazy one who knows clearing dried weeds and stuff actually doesn't prevent fires and makes them way worse when they do occur? Controlled burns are a much better method for the environment.

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Halichoeres@reddit

Yup. California's hills are chaparral. It's been burning at short intervals for millions of years. If they're going to rebuild they should rebuild at higher densities closer to the urban core. Big fancy houses on hills look nice, sure, but they're asking for trouble.

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JoeCensored@reddit

Or just bring back logging. The logging companies will not only do the cleanup for free, but pay the state for the privilege.

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Valreesio@reddit

This is a huge issue that environmentalists hate. Responsible logging and replanting helps prevent and/or control future forest fires.

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canned_spaghetti85@reddit

Gee yeah yah , and then they’d charge lower annual premiums, right?

Cool.

Have you ever heard of any company that [needlessly] increases its own costs SO THAT it can charge less money?

Unless you specialize in the business of going out of business, then What kind of business model is that?

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TedW@reddit

I think the idea is they would spend money to prevent paying money, not so they could charge less.

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canned_spaghetti85@reddit

if you reduce risk, then you cannot justify charging as high of premiums anymore.

This aspect cannot be ignored.

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TedW@reddit

I guess it depends on how much the risk decreased, vs avoiding new risk, vs inflation, etc, etc.

If incidents like the LA fire would normally cause a risk re-assessment and rates to INCREASE X%, but fire reduction efforts would avoid increasing the risk, then rates could stay the same.

But that's just an imaginary number based on zero research.

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canned_spaghetti85@reddit

Very simple scenario.

You’re an insurance company in CA. I own a $750k house, you insure me for fire coverage. The annual premium you charge me is $2,000.

Under this new model, you spend approx $300 each year maintaining my nearby shrubs and dead vegetation, to reduce the risk of my house burning down by SAY.. 25%.

But here’s the thing : if my overall fire risk goes down by 25%, why should I still be paying the full $2000 premium?

Shouldn’t that ALSO be reduced by 25%? Makes sense, right?

Alright, so you agree. My premium is now $1700.

So you, the insurance company, is out $300 for fire prevention PLUS the additional loss of and additional $300 in billing revenue, to still insure the same $750k house.

That means you collect $1,400 of what would have been the original $2000 premium, right? That’s just 70%, which is a 30% loss in revenue.

But REMEMBER, the risk of my house burning down only reduced by only 25%.

You lost more than you stood to save.

Now you understand?

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TedW@reddit

You just described why I wouldn't use those numbers, but not why different numbers aren't still reasonable.

Imagine a different scenario where your risk increased 20%, and I spent $100 to reduce that to only 10%, and still charged you more than you're paying now.

I spent $100, made $200, and you saved $200. Everyone won.

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canned_spaghetti85@reddit

With your numbers:

The issue with CA insurance, and I don’t blame the insurance companies btw is that the State Insurance Commission had for decades prohibited insurance premium increases beyond a certain amount each year.

For example the premium cannot raise by more than say 3% each year. Well is this mostly okay if there is low risk of file, but it’s a ticking time bomb because the house values are increasing at a faster rate anyway (like +7 to +12% each year). So when it finally does burn, the insurance suffer what’s called in finance a huge “haircut” ( amount needed to make up tue difference).

This is why they are getting out, at least until CA Insurance commissioner changes their policies.

So in your scenario numbers:

Even if my fire risk suddenly jumped by 20%, like you said, the state of CA wouldn’t even allow you to charge me more than say the additional 3%. So my once $2,000 premium now becomes $2,060. Great, so your insurance company risk increases 20%, like you said, but you only have an additional 3% revenue help offset that. That means you’re already operating at an adjusted 14% loss regardless if we did nothing at all.

(And that’s assuming my property value doesn’t increase a single dollar that year, scoffs)

Okay, Say we did go along with your proposal. You now spend $100 to reduce my fire risk by 10%.

I say to you, hey if my risk of fire went down by 10%, then I shouldn’t have to pay the full $2,060 premium. I want a 10% discount, since the risk went down by that much anyway. So you agree, and my new premium is now $1,854.

That means you paid out $100 for fire prevention service, and the $206 lost billing revenue. So you end up with $1,754 of what should have been $2,060, which is a -14.86% loss in revenue.

Which means SURE you reduced the the fire risk by 10%, but it costed you 14.86% of billing revenue. You’re losing money.

How is that a wise business move on your end?

(Also worth mentioning: Don’t forget your risk factor is still +8% remember? Because it was 100 +20% at the start of this, and your fire prevention cut 10% off that, so 120 x 0.9 is 108, so 8)

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Round-Heart-5726@reddit

Unfortunately the insurance industry only knows one thing.. Greed. Period. How to take in more money and payout as little as possible. Profits in the millions quartely, pay their 'employees' nothing, and keep the rest. There is no money to be made in "preventing" these diasters. Sometimes they don't pay when there are disasters when they absolutely should! The worst scam ever.

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ecswag@reddit

I’m not really an insurance apologist, but obviously insurance companies are for-profit businesses. If someone lives in an extremely high risk area, they should have very high insurance rates. If the insurance companies aren’t allowed to charge higher premiums then they can just not renew your policy altogether. If you want to choose to live in a high disaster risk area, that’s fine but you should also pay much higher premiums than someone who lives in a minimal risk area.

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Budget_Putt8393@reddit

IIRC, the Pinkerton detectives worked for the Pinkerton insurance company. They would protect trains, and hunt down train robbers that were insured.

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deleted_by_reddit@reddit

[removed]

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actuarial_cat@reddit

It’s is call a no-opt out tax and public services

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Strange_Space_7458@reddit

Here's a counter idea. Property owners pay to mitigate risks to their property.

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Sanchastayswoke@reddit

Yes but it’s not always their own property that is causing the most risk. Like a home built next to public land that is covered in dry brush.

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kyrsjo@reddit

So, property owners pay taxes to manage common risks?

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mossed2012@reddit

Yeah man, why use economies of scale when you can just force everyone to pay full cost. Gotta love freedom amirite!!

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silentstorm2008@reddit

THey are not in it to prevent the event they are insuring against. They are in it to keep everyones premium and not pay out anything. (AKA maximum profit)

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ashwinbhagu@reddit

My startup works on selling parametric insurance for natural catastrophes. We use the proceeds for mangrove restoration which reduced the impact of future weather events

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BigfootSandwiches@reddit

It’s cheaper and easier for them to simply not pay out.

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piecat@reddit

Poof, wish granted.

Public budgets for Fire and EMS are slashed as "redundent" since insurance companies run a private system.

Now fire and ems calls are prioritized by cost to insurance company.

They'll let your house burn down to save your rich neighbor's priceless collection of trinkets.

Heart attack? They'll let you die if they think the medical bills are higher than your life insurance payout, but maybe they'll save you if you're young and have high chance of survival to pay raised insurance premiums for the rest of your life.

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jaywaykil@reddit

r/monkeyspaw

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jaywaykil@reddit

Not entirely crazy. Medical insurance companies do exactly this by encouraging and paying for vaccinations and regular checkups.

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fireduck@reddit

My insurance company will set some guys to my house if it is threatened by forest fires. I'm not sure what they will do...I imagine it involves chainsaws and swearing.

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Materva@reddit

Chainsaws and Swearing would be an awesome band name!

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deleted_by_reddit@reddit

[removed]

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Delicious-Badger-906@reddit

Tragedy of the commons. What incentive would people in that area have to pay insurance premiums if the company is already doing the work?

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C_H-A-O_S@reddit

I mean, they could, and I'd support it, but you're forgetting about their humble shareholders. Won't you please buy their daughters ponies? Oh please please please?

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HeathrJarrod@reddit

Thunderbirds are Go

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uncertain_expert@reddit

Fire insurance is what started off many of the original fire services - they would only put out a fire if your property had (their) insurance cover. In a way this goes back as far as Crassus in Ancient Rome, whose fire-fighting team would only extinguish a fire if the building owner agreed to sell the building at a ‘knock down’ price.

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in-a-microbus@reddit

they would only put out a fire if your property had (their) insurance cover.

This famous Marxist talking point has actually been debunked

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shponglespore@reddit

Ah yes, an extremely common misunderstanding is a Marxist conspiracy!

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snoweel@reddit

This idea is mentioned in this column. https://thedispatch.com/newsletter/capitolism/los-angeles-destruction-was-fueled-by-bad-policy-and-bad-incentives/

Sounds like they do in some cases.

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Sirlacker@reddit

Your insurance claim has been denied on the following grounds

Page 976, Paragraph 86, Clause 26

"Coverage for fire damage shall be null and void in the event that the fire reaches or exceeds a temperature of 600°C. Claims arising from such conditions are expressly excluded from coverage under this policy."

The LA fires far exceeded these temperatures. Therefore your claim has been denied.

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