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As I understand it, in the US, flood damage is almost never covered by homeowner's insurance. It is covered by flood insurance from the US government. The reas
by Mz 9y ago
As I understand it, in the US, flood damage is almost never covered by homeowner's insurance. It is covered by flood insurance from the US government.
The reason for this is because most human settlements are near water. It is not only essential to life, it is a good means of transportation and has been for a long time. So most human settlements are built in flood plains. Thus, sooner or later, most homes will be at risk of flood damage.
Insurance is about risk management. There is no risk to manage here in terms of taking a financial bet. It is all downside for the insurance company. The question is not IF the house will be in danger of flood so much as WHEN. Insurance companies try to avoid such bets, for the most part. (Not counting life insurance.)
- losteric 9y agoIf and when are the same from a risk management perspective... Have you heard of life insurance? 100% of customers will die, the bet is whether they die before the collected premiums exceed payout.
- Mz 9y agoNo, actually, a lot of term policies basically bet that you die after the policy expires. Whole life policies make the bet you are describing. They are a lot more expensive than term policies and you can borrow against them because you are basically putting money into a fund in some sense. The vast majority of life insurance is absolutely a bet. Many, many life insurance policies are only good if you die on this flight to New Zealand or if you die in a car wreck or if you die in the next five years while still quite young. People buy these things because they are cheap as all fuck because they are long shot bets. Most people won't die on their plane flight or in the next five years while in their 20s or 30s. And the last line in the comment to which you are replying makes it crystal clear that I have, in fact, heard of life insurance.