Saturday, 14 January 2012

Insurance - the white man's burden

Apologies to the Goon Show for the title. This was an episode in which Neddie Seagoon was sold the rights to the English channel at a real bargain, with the only catch that he had to insure his new purchase, against fire. You can probably hear it here if you wait long enough:  Also apologies to anyone who finds the Kipling work offensive. 

I was talking to a teacher in the economics faculty the other day, and he asked how I was going to pay for my house. "I don't know," I replied, "I thought you were the one in the economics faculty." In fact he teaches constitutional law, not economics and most of the time I was trying to convince him that England doesn't have a constitution.

The insurance man came around in the morning. At the moment, he just insures our car, but we're looking at getting some insurance for the house. Fire and earthquake insurance are both available. He confessed that until March he'd been advising people against getting earthquake insurance in  Matsumoto, although has changed since the big one in the North East, and one in Matsumoto in June that was smaller, although with a magnitude of 5.5 was the biggest around here for a long time. 

Insurance seems to me a bit like gambling, only the other way round. There is a chance you could lose, and if you pay a relatively small sum, that chance will go away. If there is a fire, or an earthquake, then we could lose our home, and if we haven't paid off the loan yet, we would still owe money on it. If there is an earthquake big enough to seriously damage the house, then unless it's very localised, it will have damaged schools, businesses and local infrastucture so our house, in the grand scheme of things, is not going to be so significant, but having something afterwards may be a great help.