tag:blogger.com,1999:blog-2830084253401570472.post1198394817886301263..comments2024-03-28T09:22:36.967+13:00Comments on Offsetting Behaviour: In which Seamus proposes a tidy solutionEric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-2830084253401570472.post-38111014741088375912010-09-22T10:12:45.759+12:002010-09-22T10:12:45.759+12:00In the grand scheme of things, EQC is likely a neu...In the grand scheme of things, EQC is likely a neutral; I have a hard time seeing how it does either much harm or much good. Except if it is 1)compulsory and 2) ridiculous in its portfolio management.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-57501409598829107062010-09-22T09:44:38.113+12:002010-09-22T09:44:38.113+12:00Yep, agree it's likely that if demand for this...Yep, agree it's likely that if demand for this sort of thing was sufficient we'd see private insurance companies offering land value cover in the absence of EQC. My take on the EQC is that it provides a single authority for dealing with large natural disasters and the like, a one-stop-shop if you will. It has virtually become part of the civil defense infrastructure in a way. I can see some value in having a single coordinated response to these sorts of events. Certainly private insurance companies could perform the same role for their customers, but my gut feeling is that the public has some distrust in private insurers, and that they get some peace of mind knowing that a govt backed insurer is in place during emergencies. However misplaced this may be, I don't think we can ignore the psychological benefits of having perceived secure guaranteed cover for the masses after a natural disaster.Latsnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-16463476197222953822010-09-21T11:32:40.018+12:002010-09-21T11:32:40.018+12:00Oh - the other obvious benefit of EQC is that wher...Oh - the other obvious benefit of EQC is that where private insurance covers the cost of rebuilding your house, it doesn't cover the land value lost if you can't build on your property. So if the earthquake leads to rezoning such that you can't build where you were, you have to buy another section on which the insurance company would build a lot. EQC cover ought plug some of that gap. Again, though, it's unclear that the market wouldn't provide that kind of coverage at extra premium in the absence of EQC.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-16361639847281598742010-09-21T11:27:11.042+12:002010-09-21T11:27:11.042+12:00Market demand for private insurance that includes ...Market demand for private insurance that includes natural disaster coverage may be somewhat attenuated by the existence of EQC; that said, pick up any issue of the paper from the last couple of weeks and check out the full page ads from pretty much every insurer telling their clients how to lodge claims. I'm not sure that "Act of God" is that big an out these days.<br /><br />I can buy that EQC can help facilitate really quick payment of small amounts prior to full assessment where private insurers may be reluctant to do so.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-8793338996926209812010-09-21T10:48:23.516+12:002010-09-21T10:48:23.516+12:00How cynical of you Eric :) From the EQC website:
...How cynical of you Eric :) From the EQC website:<br /><br /><i> EQC was established by the Government in 1945 to provide earthquake and war damage cover for purchasers of fire insurance. Later, cover for other natural disasters was included and, later still, cover for war damage dropped. The modern EQC is a Government-owned Crown Entity. </i><br /><br />These days it is a helpful backup to regular insurance, as companies here are very quick to find cause to not pay out on claims. Often insurance companies include an "act of god" clause which allows them an out. Which came first however is debatable. I suspect insurance companies wouldfind it more difficult to justify weaseling out of paying out on act of god claims if the EQC didn't exist.Latsnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-7562027946243374752010-09-21T09:03:56.472+12:002010-09-21T09:03:56.472+12:00It's hard to come up with great arguments for ...It's hard to come up with great arguments for it. The best I can think of is that it makes it easier for the government to avoid bailing out people who don't have insurance: the government guarantee goes only to folks who have private insurance coverage.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-15548857841654827822010-09-21T07:51:43.552+12:002010-09-21T07:51:43.552+12:00Coming from somewhere else I can't see the poi...Coming from somewhere else I can't see the point of EQC. Showing my ignorance, I initially expected that my insurance company would cover the house for earthquakes, reinsuring somewhere else as for any big risk.<br /><br />So what is the point of having this extra step/organization?Luishttp://apiolaza.netnoreply@blogger.com