[LINK] Insurance [WAS: NBN white-elephant-to-be ...]

[David Boxall]

Off topic for Link but, as it came up here:

On 26/08/2010 2:04 PM, Janet Hawtin wrote:
> ...
>> We are also adopting insurance models which cut away at social capacity.
>> The public liability and professional indemnity models of insurance
>> feed good income to insurance companies but
>> are a very poor option for most purposes because they raise barriers
>> to entry in very fundamental ways.
>>
>> If a small community has a CWA or other community meeting space or
>> group they now need
>> to fund an insurance company in order to be inclusive and welcome the
>> public to their event.
>> This might not matter in a large community but these costs are
>> counterproductive in small communities,
>> and are an obstacle for many fledgling community ventures.
>>
>> Midwives and homebirth are another prime example. Midwives now need to
>> operate through a hospital to be covered by the new
>> insurance required. It is illegal ($30 000 fine) for them to offer
>> support to a woman in their community without that hospital guarantor.
>> This is while we have closed many regional hopitals and have reduced
>> beds in hospitals.
>> This also means that if a pregnant woman is in distress in public we
>> have made it illegal for people with skills to come to their aid.
>> New Zealand has been more responsible about its approach to this
>> situation and is supportive of both hospital and community practice.
>> ...
Insurance is pretty much an article of faith for most of us. I don't 
know whether there's a good reason for that or if it's just a product of 
decades of Insurance industry conditioning. Fact is, commercial 
insurance is rarely value for money.

In 1980, I began building in a bush-fire area. For a couple of years, I 
paid insurance at understandably high rates. Then I did my sums and 
figured out that, at the rates I was paying, within 15 years I'd have 
paid the cost of the house in premiums.

That was almost thirty years ago. In the interim, I've invested what I'd 
have paid in premiums. I now have enough saved to replace the house and 
contents several time over. The accumulated financial cushion has 
enabled me to avoid taking out several loans for major purchases, 
leading to further savings.

There was a risk of catastrophe and there have been a few heart-in-mouth 
moments as fires threatened. I elected to bear that risk. As it worked 
out, the only loser is the insurance industry.

My point is that commercial insurance is not a good idea. Mutual 
insurance is a different story, but most mutuals have sold out. Where 
government mandates insurance, government should be the insurer. Leaving 
it to the market is a cop-out (and a cowardly form of back-door taxation).

-- 
David Boxall                    |  My figures are just as good
                                |  as any other figures.
http://david.boxall.id.au       |  I make them up myself, and they
                                |  always give me innocent pleasure.
                                |                     --HL Mencken