1. #1
    Senior Member
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    Default Interesting article...

    http://www.ffbic.com/actuary/papers/cpcudeerfieldbw.pdf

    That's a link to a pdf article (You'll need Adobe Acrobat Reader to view it).

    I stumbled across it today when looking for something else (search engines return weird results sometimes!), it's written for insurance actuaries (read: dry & kinda boring), and the article deals primarily with Hurricanes, but here is the nugget that I thought was very interesting:

    Some of the effects of under-pricing insurance include:
    Consumer:
    Excessive development.
    Inadequate incentives for mitigation.
    Poor construction quality.
    Unrealistic expectations of cost of living in risky
    areas.


    Think of it this way:
    Why build a McDonalds that can withstand a fire when insurance is so cheap, they'll replace it.
    Why put in sprinklers (mitigation) when insurance is so cheap.
    Why avoid trusses (quality) when insurance is so cheap, they'll replace it.

  2. #2
    JTL
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    Dry but interesting read. It is indicative of the role that the financial component plays in safety is perhaps the largest role of all. It all sounds sterile but it is the lives of firefighters that are being sacrificed for a business person to build a low end structure and play the odds that nothing will occur. When it does occur the price of rebuilding is cheap. While we look at the lives they look at the numbers.

    Jay

  3. #3
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    In our area none of the fast food places have insurance. It is cheaper to risk the possibility of fire than pay the insurance. Yes, command takes that in to account at the fires

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