A Conversation with an Insurance Agent

There has never been a fire in my neighborhood since I moved here. Look, there is a hydrant just across the street. My house is pretty much fireproof, and my family is very careful. Can’t you give me a lower rate?

Sorry Sir, my company’s rates are based on carefully calculated risks. If you want to be insured by us, you will have to pay the same rate as others.

What about my flood insurance then. It is much too costly. I can’t remember my property ever being flooded.  Look at those dikes along the river.  Can you even imagine a flood topping those. Surely you can quote a lower rate.

No, your house is in the flood plain of the river. If my company insures you against loss, the cost of insurance must be based on our calculation of risk of loss rather than yours.

Well shucks. I’m going to lean on FEMA to change their maps so that my house will be out of the flood plain. Then I should get a lower rate.

No, the risk would be unchanged so the cost should be unchanged, and your house would still be in the flood plain.

© William Hungerford – February 2014



About whungerford

* Contributor at NewNY23rd.com where we discuss the politics, economics, and events of the New New York 23rd Congressional District (Allegany, Cattaraugus, Chautauqua, Chemung, (Eastern) Ontario, Schuyler, Seneca, Steuben,Tioga, Tompkins, and Yates Counties) Please visit and comment on whatever strikes your fancy.
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10 Responses to A Conversation with an Insurance Agent

  1. Barbara Griffin says:

    I’ve often wondered why many health insurance plans only offer “single” or “family”…and charge my husband and me as much as they charge a couple with several children. How about a “couple” plan? For an extra fee, some plans offer dental insurance…which actually covers little to nothing when you try to use it. Then there’s car insurance that either drops you or raises your premiums if you file a claim. You can’t win with that industry.


  2. solodm says:

    In terms of flood insurance, Reed’s interest and “feedback” he says he’ll take to Washington, could well have gone into the circular files before even leaving the meeting.

    “Now several lawmakers are demagoguing the issue of their constituents’ sticker shock in an effort to delay the implementation of the rate increases. They bandy about exorbitant premiums that are in excess of $25,000. (It’s worth noting that since the maximum level of insurance coverage for a property is $250,000 – plus $100,000 for contents – that this premium would mean the property is expected to be completely destroyed every decade or so).”



  3. whungerford says:

    Normally, insurance premiums should cover the risk of loss. If private insurers underestimate the risk, stockholders take the hit. With Federal Flood Insurance, if the risk is underestimated taxpayers take the hit. Tom writes “What I’m hearing from local homeowners is that rate increases are not representing a fair assessment of flood risk …” Homeowners might well think that, but the general public had better beware.


  4. BOB McGILL says:

    Someone who builds a house in a floodplain and doesn’t think there will ever be a flood, is a fool. Now the insurance companies are ” BAD GUYS ” because they know the risk and don’t want to lose money. Only a Martha lover would expect any different. I have been flooded out twice,1972 and 1992. There wasn’t much damage and none at all to the house. I fixed it myself and would never think of buying insurance. You democrats just want a guarantied perfect life !


  5. whungerford says:

    I agree Bob, except for the part about Martha. I don’t know what Martha thinks about Federal Flood Insurance. We do know Tom Reed’s position–he would like the taxpayers to pick up more of the tab. Look up H.R.3370 – 113th Congress (2013-2014): Homeowner Flood Insurance Affordability Act of 2013. Tom is a cosponsor.


  6. BOB McGILL says:

    at someone else’s expense of course 🙂


  7. BOB McGILL says:

    Have you ever noticed that the so called environmentalists squawk about protecting the environment, then build a bunch of houses right in the middle of it ? Just look at the Finger Lakes, ringed with houses, then they bitch about, high water, low water, ice and storm damage. They all should wear a sign that says ” protect the environment, just don’t protect it from me ! “


  8. Anne says:

    If you want to buy a house in a flood zone and are going to hold a mortgage on it, the bank is going to require you to purchase flood insurance, just as they require you to hold homeowner’s insurance (which does not cover flooding) for any mortgage. I think in the case of flood insurance, it’s correct for the burden of that cost to fall on the shoulders of the homeowner, and not distributed among the larger population of taxpayers. You were lucky, Bob, to have been flooded twice and not to have suffered much damage either time. That, of course, is not always the case. When Agnes hit in 1972, the house we lived in had 11 feet of water on the first floor. The structure survived it, but on our street, about one out of every three houses had to be torn down. Most of the people there didn’t seem to have flood insurance, and on those building lots, pretty much, trailers went up.


  9. whungerford says:

    I agree that most of the burden of flood insurance ought to be borne by homeowners. Yet I have some sympathy for those whose property is threatened by rising sea levels as the responsibility for this falls on us all. Perhaps a modest public subsidy is reasonable for property built before some certain date in the past.


  10. Anne says:

    A sort of grandfather clause? Help with relocation in the event of flooding would be good, too–this was an issue on the NE coast a number of years ago, as properties would get repeatedly wiped out by repeated hurricanes…and owners would just go back and rebuild in the same place. The other thing that would really help would be for our elected officials to get serious about climate change, already, and get to work on it (or anything, really) for once.


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