Home Insurance Tulsa | Fire Insurance
Let’s see, we’re on podcast number 142. This is the ensure you Oklahoma all original content podcast slash blog or website content, and today we’re talking about fire. Fire is your most basic insurance coverage and insurance coverage used to just be called fire insurance and it started in London and what happened was you would start a fire department and they would go around and you would subscribe to the fire department and the fire department would give you a number and you would put that on above your door and that’s how they would know if you were subscribed to the fire department, so tire department showed up and you had this number bolted to the side of your house or in front of your house. Home Insurance Tulsa You would be covered and they will put out the fire and your house still. Now, if you didn’t have one, they would show up and watch your house burn because you didn’t have a subscription to the fire department and that is your first form of an insurance payment.
People would pay him a small amount of money and have their house protected. Now, of course it wasn’t protected to rebuild it, it was just protected to put out fire, which also led to addresses on home so people would have an address so the fire department would know where to go. Isn’t that interesting? So insurance and home addresses or born out of the same thing. It wasn’t quite the Home Insurance Tulsa that we have today, but it was a form of insurance and that is how a street addresses became and a insurance started just like that. And if you go to London today and go through old neighborhoods, you can still see these old fire department, a fire insurance placards on building. Home Insurance Tulsa Just fascinating when you go to something like that and you see how a new our country as compared to other countries. So things are different today, but we still have fire and home insurance. Tulsa are ensure you, Oklahoma. We still insure against fire. Now what the camp fire fire in Colorado that’s going on right now. The camp fire fire has burned an area of California larger than
the city of New York or Manhattan. Not The city of New York borough of New York, um, and it’s destroyed one complete town paradise, California, and it’s still moving. And the estimated cost of this fire is about $19,000,000,000. Well, if you have home insurance, Tulsa and your house was burned down by the campfire, Home Insurance Tulsa you’re going to be okay. Insurance Company is going to come in and pay. But what about people who didn’t have insurance because it is so expensive there? Uh, because of all the fires, the fire area, you are likely to pay a lot of money for it. But if you didn’t, your house is not covered. It’s like the fire department in London showing up and you have that brass plate on your plate probably on your or you don’t have it on your house and they just watch it burn. Have you had that breast plate on their insurance company’s going to come in and pay.
So what about people who don’t have it? Of that $19,000,000,000? What if you don’t have it? Well, likely what’s going to happen if the government’s going to step in right or wrong? Like government’s going to step in and fix it. Yeah. The federal government will probably come in with the municipality and help with buildings of the city and some infrastructure that might need to be repaired, whether that’s water, sewer, power, whatever it is, the likely come into the people that don’t have home insurance and offer them low interest loans to rebuilt. So let’s say you have a three to $400,000 mortgage. Your House Burns down. You want to rebuild it, half billion dollars to refill that. Sam’s going to come in and give you like a one or two percent loan for that probably, but the fact is you’re still in the hole now for $800,000 because you didn’t have home insurance. Tulsa. Unreal. Home Insurance Tulsa That just happened, but no. What about the law of large numbers? Now the law of large numbers is the concept of insurance. That means everyone pays a little and because there’s a large data set, we are able to predict the future or the expected losses of this, of these numbers. Well,
as large as the camp fire fire is, it’s not a large enough area to create enough data for the law of large numbers. You have to look over the entire state or parse portions of the state. Now if you’re in a fire area, you’re likely to pay more than those who are not in a fire area because it wouldn’t be fair to those who are not fire, so they’re going to pay a little less, but so everyone pays into this big pool and those who have a loss are able to take out of the pool of money to cover their losses and c insurance concept. There was a pool of money for the fire departments in London and there’s a pool of money for the house in California now, but what if you are insured with a, an insurance company like mercury insurance and they are domiciled in California. Farmers Insurance domiciles and jump on it and they’re going to see huge losses. Billions of dollars of loss. Home Insurance Tulsa What happens if you’re insured with insurance company in Oklahoma? Are you going to. Are Your rates going to go up because of that? You know, an insurance company has to remain profitable.
Business can’t stay in business if there isn’t a profit. Even though mutual insurance companies running nonprofit, they still have people to pay and keep other claims and have to have stuff. I have that money in reserves for one big claims happen, but usually what happens is insurance companies will keep state separate from other states or at least geographic regions. And the reason for that is it wouldn’t be fair for people in Oklahoma to pay more money because there was fires in California and we’re all in the United States. Home Insurance Tulsa But if that happened, quite often people will say no and they wouldn’t pay it and they will use their feet to vote and they would go with an insurance company that wouldn’t do that. So if you have home insurance, Tulsa in Oklahoma, you are not to worry about having a.
having your rates go up because they’re huge. Fires in California were something large in northwest Arkansas. The state is just an arbitrary border set up by the federal government and insurance companies don’t necessarily have to follow state guidelines except that’s where their laws are made and state commissioners have to approve rate increases, but the fact is you should not be affected by something that happens in another state or even another area of your state. You know, in Oklahoma we have Tulsa, Oklahoma, we have Oklahoma City and they’re far enough apart where we could hit. We do have enough data to figure out the rate for each part of the State rather than lumping them all together. Home Insurance Tulsa In fact, it will be lazy for a company of lump it all together as one state and have rates for just one state at a time for their insurance rates. So likely what happened is metro areas are kept different and you know, good companies that don’t aren’t lazy. Oh, actually slice and dice parts of town based on expected loss ratios are expected claims and those parts of town. And that’s it for this podcast.