DISASTER RESILIENCE (INSURANCES)

Remember a disaster is local, while a catastrophe is at least regional and probably national in scope. Resilience we have built into our systems will be inadequate in a catastrophe. Resilience typically takes the form of private or public insurance, which relies on many paying in so a very few can draw funds out. Insurance companies take your premiums and invest the money in securities like stocks and bonds. In a catastrophe, these companies are destroyed. The investments of insurers are worthless. There is no insurance for a catastrophe.

Federal Disaster Insurance has many forms like flood insurance and crop insurance. In a catastrophe, the federal government will have more important uses for its funds than making good on individual property losses from floods, or hail damage for farmers, for instance. Even insurances like Medicare and Medicaid will have to be suspended, to cover the costs of refugee care.

For a Plan C, it would be prudent to simply suspend all public and private insurances for all claims. The law would be to simply let the losses fall where they may, without paperwork, or claims, or litigation of any kind. It is not realistic to burden a recovering society with risk sharing. Instead insurance issuers would be given a grace period to see what is left and begin anew without any liability for past claims. They would be able to issue or renew policies and collect premiums for FUTURE risks. In other words, insurance is for future local disasters, not catastrophes or past disasters. The insurance function is critical for restoring a functioning society, which means freeing the insurers from past obligations and saving them as ongoing viable businesses for the future.