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