Could cities create their own insurance company?
Is it possible for a city or cities to create an insurance company that would be considered not for profit thus making home owners insurance premiums drop?
Answers:
Well, if they wanted to, they could, but it wouldn't put together premiums drop for several reasons:
1. If you look at city services, you'll find out that it costs the city between $.30 and $.60 cents on the dollar to administer stuff. Insurance company admin costs are uncommonly over $.20 on the dollar. So the admin costs will be higher.
2. If you've ever wait in string at your city hall, or tried calling them by phone, lately THINK of what the wait would be if everyone next to insurance called in that! You'd get HORROFFIC service.
3. For cities within high risk areas, aka, URBAN cities, ANY urban cities, the rates would budge up, as there is more fire, vandalism, embezzlement, etc. in a more densely populated nouns. Fires in a city from time to time take out just one house. Country fires mostly ONLY take out one house.
4. The risk is much, much better for ANY peril. Part of what the insurance company does is spread the risk - so everyone who has State Farm, for example, pays their premium, and when Florida get hit with a unpromising hurricane, State Farm doesn't go broke paying $3,000,000,000 contained by hurricane claims. If a city had even 25% losses due to a storm (hurricane, tornado, terrorist attack) how much money would they requirement to collect from each homeowner contained by order to reimburse off those kinda losses? It would be ASTRONOMICAL.
So the current system is cheaper, more effecient, give broader coverages, then, powerfully, just more or less ANYTHING the government can do.
Just look at organization housing, if you want a great example of how well governing body programs work.