[TowerTalk] Insurance for Tower

Joseph or Ruth Patrick hdmc38 at bellsouth.net
Thu Nov 28 10:59:40 EST 2013

Jim I think you are right. By the way we really do appreciate your knowledge and input on the reflector. We have been dealing with this issue in Florida since Hurricane Andrew in 1992. I have waiting to hear that this is not just a Florida problem as there are catastrophic losses everywhere.  As you say it is what it is. If you can get a policy from a real insurance company you know one that pays it's claims It will cost a lot more. Don't forget about the cost of re-insurance has risen also.
As like most things It has to do with money. They want to make it so we get to pay them.I will say this. Having worked in 3 major storms in Florida I think I would be blessed to lose all of my antennas and such, but to have my home intact and with very little damage. I love my radio stuff as much as anyone else. Well It's time to load up the truck and head out for dinner. To all have a great Thanksgiving. We all have much to be thankful for and are truly blessed Thanks again Jim.

73 DE K4XZ Joe Patrick
God Made Man
Sam Colt Made Them Equal

 From: Jim Lux <jimlux at earthlink.net>
To: towertalk at contesting.com 
Sent: Thursday, November 28, 2013 10:15 AM
Subject: Re: [TowerTalk] Insurance for Tower

On 11/27/13 4:55 PM, KimoChun wrote:
> I don't recall the details of what part of my homeowners policy covered my
> tower failure around 2000, but they covered all material and estimated labor

On aspect, not specific to Kimo's anecdote, is that experience with insurance companies before 2007 may not be relevant today.

The market and banking system anomalies hit insurance companies hard. In school you learn about the idealized scheme where the sum of all the premiums collected from all policy is slightly more than the sum of all the loss payouts for the year.

However, in reality, what happens is that the money that is paid in, and not yet used to settle claims, is invested in various speculative instruments ranging from T-bills/T-bonds to Credit Default Swaps and other exotic investments.  In "good times" the profits from these investments allows the insurance company to charge lower premiums for a given loss experience (e.g. they only need to collect enough that premiums+investment profits is > loss payouts).

AIG, for instance, was making money hand over fist by taking the counter side to mortgage defaults: e.g. they were betting that the mortgages wouldn't default, and they could collect premiums and never payout. This allowed them to offer very competitive rates in their other lines of business.  OOps, that didn't work so well when the laws of probability went against them.

So, now, insurance companies in general have to charge higher premiums: the investment income isn't there, the loss payouts are still there, so premiums have to go up.  Or, they can manage the future loss payouts.

And the latter is being manifested in a variety of ways:
Here in Southern California, it is becoming VERY hard to get new policies written on existing houses, because large swathes of subdivisions are now deemed "high fire risk"; essentially you draw a boundary some X hundred feet from the boundary to undeveloped land, an everything in there is in the hazard zone.  Whether they are or aren't in real life is irrelevant  (There are lots of cases where the concern is legitimate.. urban/wildland interface is a big problem).  The problem is that anything that triggers a re-evaluation is a potential cause for your insurance going away.

I think this is similar to the problem in Florida with hurricanes.  The big players have decided it's not worth it to insure houses in FL any more.


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