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Author Topic: Private Property Insurance  (Read 371 times)

cxxguy

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Private Property Insurance
« on: May 10, 2007, 10:01 PM NHFT »

There is a variation on the Freedom Insurance theme:
  Private Property Insurance

These policies would be limited, and the coverage purely monetary (although we might find in some cases that it was cost effective to provide legal defense rather than paying a claim).  The idea is as follows:

The company agrees to reimburse the insured, at fair market value, for any property or property value lost to the government through any of the following actions:

  (1) Eminent Domain Takings
  (2) Asset forfeitures unrelated to criminal trial in which the victim/defendant is convicted.
  (3) Loss of Enjoyment of Property due to "effective confiscation" of property due to environmental, historic preservation, or other regulations.  An example of this is when the government decides that some rare slug lives on your newly purchased, million dollar, building site, and you are neither permitted to build, nor able to sell, so the value of the property but not the property itself has been confiscated.
  (...) What else should be covered?

This seems to be a good candidate for insurance coverage, because
  (1) Losses are very rare.
  (2) Losses to uninsured victims can be financially devastating.
  (3) Public outrage over the 'Kelo' decision may well have rendered people aware that the risk exists.

There are some risks inherent in this scheme:
  (1) There is the difficulty in determining what the actual value of (especially real estate) property is, in the absence of a willing buyer and seller.  This could lead to inflated claims.
  (2) Related to (1), a politically connected customer might be able to get a friend on the local city council to have his home confiscated, for the sake of making an inflated claim.
  (3) Non customers, warned of imminent eminent domain action might be able to quickly buy a policy before the seizure of the property was make public.


Things to like:
  (1) Advertising could help the public to recognize that government is often a threat, not a protection
  (2) Some of the people who get hit with these things are left in such sad shape that I want to weep.
  (3) Since (I assume) all cases of eminent domain are a matter of public record, it should be easy to get data to feed to an actuary to calculate premium costs.

Things to dislike:
  (1) Unless there exists a way to insure against our risk (can insurance companies buy catastrophic claim insurance)
  (2) The service, if popular, could be rolled into title insurance, which would leave us unemployed (but the innocent protected)

Things to wonder about:
  (1) What sort of licensing would be required, if any?  I know the insurance industry is generally heavily regulated, but I do not know if that applies only to commonly available forms of insurance.
  (2) Could question (1) above be finessed by describing ourselves as a "mutual aid society" or some such rather than an insurance company?
  (3) Are any lawyers or insurance company executives lurking about, who might be able to shed light or provide advice on this?
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Re: Private Property Insurance
« Reply #1 on: May 10, 2007, 10:21 PM NHFT »

  (1) Unless there exists a way to insure against our risk (can insurance companies buy catastrophic claim insurance)

This is called reinsurance, if my memory serves.
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