Letter: Insurance Is a Misnomer

I built house in Malibu in 1979 and, as a past officer in the United States Navy, I was entitled to obtain homeowners’s insurance with USAA. I never had a claim until my house burned down completely in the 1993 fire. I had to sue USAA to collect my money. It took three years to settle the claim and it cost over $90,000 in attorney’s fees. After over a year of going through the aggravating experience of getting permits, it took three years to build a new house on the same property. My new insurance stopped writing policies in Malibu after paying premiums with no claims for seven years. I was then able to get insurance with the “excellent” insurance company, Chubb. 

Last month, I was informed by Chubb that my insurance would not be renewed, even though there weren’t any claims and I have paid high premiums for 10 years. I have not been able to obtain any company to write a policy for my house and I have been informed the only option is to obtain “Fair Plan” insurance. It should be called Unfair Plan insurance. The maximum coverage they provide is $1,400,000. Since my insurance with Chubb was for $2,200,000, it’s obvious I will not be able to rebuild if another disaster should occur. The coverage is also very poor, with multiple exclusions. 

There is a statement we are required to confirm with our signature, that the companies that provide this horrible coverage could be somewhat shady, and could easily go out of business. How convenient. They could close and cancel coverage, any time a major fire occurs. There is no backup for the failure of these companies. “Insurance”?

Why does our government allow an industry to function as a holding company and allow them to make billions in profits and claim poverty? Please give me the definition of insurance. We, the public, need lobbyists to help us. 

Richard Feinstein