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Stupid Bail-Out du Jour

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May 31, 2008 – Comments (2)

From the WSJ:

Taxpayers May Face Hurricane Tab

Congressional Democrats want to nationalize a chunk of the insurance business that covers major storm-damage claims, which would essentially backstop the giant insurers in case of disaster. Critics say states with little or no hurricane risk could end up footing the bill for damage in flood-prone areas...

The proposal -- backed by giant insurers Allstate Corp. and State Farm Mutual Automobile Insurance Co., as well as Florida lawmakers -- focuses on "reinsurance," the policies bought by insurers themselves to protect against catastrophic losses. The proposal envisions a taxpayer-financed reinsurance program covering all 50 states, which would essentially backstop the giant insurers in case of disaster.

The program could save homeowners roughly $500 apiece in annual premiums in Florida, according to an advocacy group backed by Allstate and State Farm, the largest writers of property insurance in the U.S.

So here we go. Shift the costs of risky construction in hurricane alley to those people who choose not to engage in risky behavior -- so risky that even the insurance companies want little or nothing to do without.

Welcome back to crazytown.

2 Comments – Post Your Own

#1) On May 31, 2008 at 11:13 AM, devoish (98.38) wrote:

I do not have a subscription to WSJ. Will that cost more or less than the 544billion proposed to subsidise nuclear power plants?

I especially like this Price-Anderson act which basically says the the Nuclear industry has to have a plan to fund, but not actually fund, a self insurance program with damages capped at 10bil after which the US Gov will step in and pay any additional claims beyond that amount. I think they are counting on trying to claim that with so much environmental pollution, you cannot prove it was a nuclear industry caused sickness.

Apparently if the Nuclear Industry had to actually buy insurance based upon the insurance company risk asessments, insurance and nuclear power would be ridiculously unaffordable. Fortunately, accidents never happen, noone ever slacks off on inpections, so... no worries.

Of course, if you live near a nuclear power plant you could just move.

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#2) On May 31, 2008 at 11:39 AM, wolfhounds (28.81) wrote:

This is just another sign that the new democrats, in the next administration, plan to take us down the path of socialism. We can always join the European Union, work 4 days a week, raise taxes to 50% to fund everything, and stop the innovation that has propelled this country.

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