Monday, March 14, 2011

How the Japanese Insurance Industry Screwed the Average Person on Earthquake Insurance

First, the Japanese government protected domestic insurers by limiting foreign insurance companies from providing insurance. Then, the government wrote regulations that limit payouts from earthquake damage.

Because of all this, many in the region, where the earthquake just struck, don't even have earthquake insurance.

There's also a loss-sharing agreement that remains in place and if the damage stretches into the billions (which it will), the Japanese government (read: taxpayer) will be on the hook for much of the bill that rightly should be picked up by the insurance companies involved..

1 comment:

  1. Wenzel,

    Don't worry about it too much. Undoubtedly, after careful cost-benefit analysis the calculating socialists in control of the Japanese State decided to throw the poor Japanese people a few crumbs from the table and enacted strict building codes to protect people from dying or being injured unnecessarily in earthquakes.

    How the writers at the NYT are able to examine a counterfactual reality where Japan does not have strict building codes and then suffers much more devastating effects following a major earthquake, which was not an inherently safer Japan due to the enhanced wealth that would've accrued to the society due to the greater scope of voluntary exchanges made possible by a lack of building codes, is unclear.

    But they're sure enough about it that they know that the building codes contributed to a mitigation of damage in the Chilean quake while the lack thereof was also a consequential factor in the death and destruction found in the wake of the Haiti quake.

    If only Japanese authorities had been prescient enough to demand building codes that were stringent enough to withstand the force of 30ft tsunami waves!