Another Advantage of Being Rich

I saw this and just had to post it. An insurance company hired a private fire crew to protect some houses it insured in the path of a wild fire. The details:

A private fire crew dispatched by a national insurance company that caters to wealthy clients is guarding 22 high-end homes threatened by the Castle Rock Fire, a blaze that has forced the evacuation of hundreds of million-dollar homes west of Ketchum.

The crew will protect only homes insured by AIG Private Client Group, an insurance company that offers "loss-prevention services" to its wealthiest customers. A truck and two-man crew sent by AIG from Montana arrived in Ketchum about 2 p.m. Wednesday to start dousing properties with Phos-Chek, the same fire retardant dropped from U.S. Forest Service aircraft.

"We're not going out there to fight the fire," said Dorothy Sarna, vice president and national director of risk-management services and loss prevention for the New York-based company. "We're out there to protect our clients."

Properties insured under the Private Client Group are all worth more than $1 million, or their owners pay more than $10,000 annually in premiums. AIG says it's not aware of any other insurance companies that offer private fire protection.

A few thoughts:

1. Membership (in the wealthy club) has it's privileges. ;-)

2. This is simply a business decision by the insurance company. Better to pay for a fire crew than fork over $22 million (or more!) to rebuild the homes.

3. $10,000 in annual insurance premiums? Yikes!

Comments

[William Tanksley]

If I read this right, the insurance company isn't merely attempting to cut its losses -- it's actually fulfilling its contractual obligation. That's why the premiums are so high; they actually promise to send out firefighters (and nobody else does).

[Minimum Wage]

Is this a great country or what?

[Patrick]

From the insurance company's point of view it is certainly cheaper to prevent than to pay out. But, I agree... $10k in annual premiums is a lot of money!

[Ben]

The original insurance companies in the United States did ONLY and exactly this: they provided firefighting services for their insureds. In cities, you could purchase fire protection, and you'd be given a special plate to put on the front of your house. In the event that your house was later found on fire, the insurer's fire truck(s) would come to its rescue.

There are still several insurance carriers whose names hearken back to this origin.

[Beastlike]

and I thought 10k/year in property taxes was bad!

The amount of Bank Owned properties on the Market in Metro Denver is crazy, and with more adjustable rate loans resetting soon there are sure to be even more of them. The positive side of REO property is that the banks usually price the homes well in order to sell them. On the other hand, the banks don't always get inspections done, so buyers have to go in blind and pay for their own inspections after they get into escrow.