Wednesday, September 02, 2009

The government already mandates insurance - fire insurance

Mercifully, the local fires have not yet destroyed many homes. Are people who own homes in high fire hazard areas able to even get hazard insurance? Yes, thanks to the government. And you.

California Fair Plan was adopted by the state legislature in 1968. It guarantees that insurance companies who do business in CA must contribute to an insurance pool that will issue a fire insurance policy of “last resort.” In other words, if you live too close to stuff that burns up and can endanger your home (see Glendale’s information here for example), nobody will issue you insurance – except the California Fair Plan. At a great rate, btw. And it’s financed through the payments the rest of us make on our hazard insurance premiums. Does this encourage home building in high fire hazard areas? Of course it does -- and has.

With fire season just beginning, and with substantial areas of the state already in flames, I wonder if any so-called “tea baggers” who live in fire-endangered areas are happy they have government-mandated fire insurance on their property?

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