Is Location Worth the Risk?

Is Location Worth the Risk?

  • Published: Jan 03, 2020

One morning last week as I prepared to hop into the shower I was surprised to find that ants outside had somehow managed to forge a trail across the shower.

But because I was in a rush to get the kids out and to school there wasn't much option but to turn the water on and to watch the little guys swirl down the drain...

I planned to call pest control later that day, but somehow never got around to it, and for the next few days I faced the same problem every morning... rinsing another couple dozen ants down the drain.  But all this got me thinking about... surprisingly... Homeowners Insurance.

So, back to the ants - when the tiles get wet, these ants start rushing around to find a dry spot and essentially start struggling for survival. Initially, I would try to rescue them, but that takes too much time, and hey - everyone's in a rush in the morning! Many of these ants usually survive - they end up very wet, but safe; and stagger away to wherever they live.

The question that comes to my mind is this - since this drama repeats itself every morning, don't these creatures understand that they are living in a very high-risk area? Is proximity to water so important to their lifestyle that they are willing to risk their lives for it?

After hearing so much about the devastation of hurricanes, tsunamis and typhoons this year, I started wondering...if humans were any more rational?

Which brings us to the question - are some high-risk locations (prone to floods, earthquakes, storms) so attractive to people, that they are willing to risk their lives for it? Certain coastal areas are known to be high-risk. Yet, these are prime locations where the affluent build their houses.

Why do people refuse to acknowledge that they are risking a lot when they live in these locations? Is this denial a result of the "It can never happen to me..." mentality? We believe that bad things happen to 'other people'- whoever they are.

And so insurance companies choose to (after recent experiences where they had to pay a lot of money to those who had suffered damages to their homes) either refuse to cover homes in certain areas or charge far higher premiums. Can we blame them?

I'm not sure what the resolution to all of this is, but it just seems to me that coastal living is, in the modern era, engaging in very risky behavior. I don't know if that means we should make it illegal for homeowners to build there, but it hardly seems right for governments to force insurers to insure homes there...