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Originally Posted by mrkajz44
Interesting reads from Macleans (which I usually dislike, so that was a bit of a surprise). I'm always torn on issues like this. On the one hand, when disaster strikes, everyone pulling together to help those in need, including financial help, is part of what makes us a civilized society. On the other hand, I feel a bit ripped off when my insurance rates go up because someone else's home along the river floods.
I still think the humanitarian angle always wins, but it is a good thought piece when people are somewhat setting themselves up for disaster (building on flood plains, earthquake fault lines, etc.)
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Perhaps a possible way to deal with the matter of people continually building (and re-building) in damage-prone areas is to continue to offer government-provided insurance to such people (priced as if the insurance were to cover 100% of the rebuild cost), but coupled with deductibles equal to at least 60% of the rebuild cost, the amount of which must be kept in cash by the homeowner in a government account.
When a disaster strikes, the insurance policy covers 40% of the rebuild cost, and the homeowner's cash set-aside covers the remaining 60% of the rebuild cost. The "excess" premium cost of the insurance (as it would be priced on providing 100% coverage but it would, in reality, only provide 40% coverage) would go towards other government funding initiatives, whether to mitigate future disasters, pay for other programs, or reduce overall tax burdens.