Posted by American Life Insurance GuideNet editor's note: After the California fire, the power company PG&E purchased $14 billion in insurance, but after estimation, it may still be unable to repay the various claims and fines that follow, so it recently filed for bankruptcy in the court.Teacher Zhang Yicheng, a senior professional from Chicago, fromLife Insurance IndustryFrom his perspective, he shared his thoughts and opinions on "California Wildfires and Insurance".
Recently, there have been many extreme wildfires in California. More than a thousand houses have been destroyed, dozens of people have died, and more than a thousand people are still missing.One director, because he didn't trust the bank, put a lot of cash in the safe at home. As a result, the mansion he lived in burned out, and the cash in the safe was all ashes.
According to a report in the Wall Street Journal on November 11th, a California power company is facing a major crisis, because the company's power grid may cause some wildfires and incur major responsibilities.The company bought US$15 billion in liability insurance, which may not be enough to cope. As a result, the company’s stock fell 14% and its bonds fell 22%.It is reported that although dry weather is prone to wildfires, problems in the operation and management of power companies may also cause many disasters.The status of the company will cause great distress to its millions of users.
Seeing these news, I immediately thought of a few questions.
The first is that the power company’s insufficient insurance is a warning to everyone.Under normal and ordinary circumstances, the insurance it buys is sufficient, but in sudden or extraordinary circumstances, it may be far from enough to meet the needs.Although it is sudden, it is actually hidden in necessity; it is said to be very, but it is a normal part.Most people buy houses, cars, businesses, etc. The liability insurance coverage is not very high. In the event of a major liability accident, they may fall into extreme trouble or even go bankrupt.
Similarly, most people buyLife insurance coverageIt’s too low; some people don’t even buy life insurance, which is worse.In fact, life insurance is also a kind of liability insurance.Liability insurance for houses, cars, and businesses is because they are afraid of accidents, they will be sued, held accountable, and demand large amounts of compensation, so the insurance company will go to court and pay for compensation.But if a person is dead, what responsibility does he have to sue? !Besides, the person is no longer there. Should you sue the dead?
Yes, the death of a person should not lead to any liability in the law. It is even possible that the person himself is also a victim of some accidents and should not bear any liability.However, the responsibility I am talking about is not a legal responsibility, but a social, interpersonal, emotional, and moral responsibility. It is the responsibility that the deceased feels and feels that he needs to bear for his family or loved ones. English is Responsibility.The accountable responsibility mentioned earlier is called Liability in English.If the deceased was an irresponsible person before his death, he did not feel any responsibility. After his death, he left financial difficulties and economic pressure on his family, but he would be secretly condemned for being irresponsible, and he would be sentenced to moral responsibility after his death.Neighbors, relatives and friends shook their heads at his family's troubles. This was really the biggest lash against him after his death.
If a person has nothing to worry about, in this world, he has no love for anyone, no financial, upbringing, and caregiving responsibilities. His death has not caused anyone's grief, and no one owes anyone emotionally, leaving behind. His belongings are enough to pay for the funeral, so it doesn’t matter if he doesn’t have life insurance.
However, if someone else relies on his or her existence, such as financial support, or life and physical care, then they are willing or unwilling to bear another intangible responsibility.For example, he or she needs to support the family, provide for the family’s food, clothing, shelter, oil, salt, firewood and rice, as well as children’s education, as well as the elderly’s daily life and physical well-being. He or she realizes that this is the responsibility given to him by social relations, social reality, and social ethics. Would buy life insurance.For another example, a person who has never married for life, once promised to take care of his elderly parents or young nephews, would also buy life insurance.
For another example, a person is very enthusiastic about a public welfare and feels that he has the responsibility to support it. He will also buy life insurance. After he leaves, he will have a life insurance compensation to continue to help the sustainable development of the public welfare.For another example, a businessman should not only care about the profitability of his business, but also care about the well-being of his employees, take good care of his employees when he was born, and feel that he has a responsibility to ensure that his business can continue after his departure and that employees can continue to have To work and earn income, they will also buy life insurance related to business-related key personnel.
Of course, the most common situation of buying life insurance is that the person responsible for supporting the family should complete the life insurance as soon as possible. In case they leave by themselves, the family will not fall into deep economic difficulties, have a place to live, and have no worries about food and clothing. Children can study at ease, and the elderly are taken care of.However, most families’life insuranceNot enough.For example, there is only a house loan of 50 yuan, but only 30 yuan of life insurance; or, there are four children who are still going to school, each child only goes to a cheap university, and a student’s annual cost is only 50 yuan. , Four children add up to 20 yuan, but the parents only have a life insurance of 20 yuan.If the child goes to a prestigious university, there are no more than one hundred and eighty thousand and fifty-six thousand yuan a year, and a life insurance of only XNUMX thousand yuan is far from enough.
The wildfires put the power company in a deep predicament. The second thing that reminds me is that the insurance company that undertakes liability insurance may incur up to 14 billion US dollars in compensation.
如果Insurance companyIf the financial resources are insufficient to pay, what will happen?Will it fall into a deep predicament, or even go bankrupt?Most of these large-value insurances have reinsurance or reinsurance or reinsurance (RE-INSURANCE). If the company undertaking the reinsurance is not financially strong, will it also be dragged down?What if the underwriting company that the power company finds and the reinsurance companies that follow are too weak to even cover the basic 14 billion yuan?In addition, the reinsurance company is only responsible to the original underwriting company. Its reinsurance contract is only a matter between the original underwriting company and the reinsurance company. The customer (power company) may not have a direct relationship. Customers are not necessarily liable, and insured customers may not necessarily be able to claim from the reinsurance company; or, will the reinsurance company completely negate the responsibility due to some procedures, laws, regulations, operations, etc.?Or will it take many years to get a solution? ...?
Some for poor financial situationInsurance companyThe insurance broker who sells it says to the customer, "Don't be afraid, there is a reinsurance company behind it."This statement is very problematic.For example, a certain person A wants to open a shop and tells the decoration company and the supplier, "My cousin will support me at the back."In fact, A is not only lacking in money, but also lacking skills. Soon the shop closed. The decoration company and the supplier found A’s cousin and came to collect debts and said, "Your cousin said you would support him. debt".Unexpectedly, the cousin said coldly, "I don't know you, I have nothing to do with you," banged the door shut.
It can be seen that it is very irresponsible and lack of professionalism to just sell the insurance, regardless of whether the insurance policy and the insurance company are reliable.
The third thing that comes to mind is that the director hid the money in a low-end safe, turning the huge banknotes into ashes.
There are many levels of safes.The lower level is used to prevent children; the higher level is against small thieves; the higher level can withstand the gravity attack of thieves, not afraid of drills, saws, and hammers; the highest level, even not afraid of explosions, can also withstand large fires burn.By the same token, the financial strength and claims handling capabilities of insurance companies are also divided into many levels.Very low levelInsurance companyIf there is a slight disturbance, there may be ineffective turnover or even bankruptcy.Low-level insurance companies are subject to considerable impacts, such as economic crises or larger natural and man-made disasters, which may cause problems.
In the financial crisis that began in late 2008, many companies were on the verge of collapse, which was very dangerous.If the current financial turmoil is a bit heavier or prolonged, I believe that many insurance companies may not be able to survive the turmoil.In the future, if a major economic crisis or a major natural and man-made disaster occurs-God knows when it will happen-among the hundreds of insurance companies in the United States, only a few insurance companies may still be able to withstand it.Dear friends, if you buy a "life safe deposit box", which level would you buy?
I don’t know if it’s innocent or fake. Some people buy insurance, regardless of whether the insurance plan they buy is reliable or not. Regardless of whether the insurance company is reliable or not, they say, "I bought its insurance. If something happens, I must pay for it!" Just like that director. Similarly, I thought I could sit back and relax by buying a safe.A wise policyholder cannot ignore the financial strength and claims ability of the insurance company, let alone be greedy or arrogant and buy a cheap and magical life insurance; otherwise, the insurance premiums that may be paid will be the same as that of the director. There is not much difference in an uninsured safe.If you buy insurance from an unreliable company, who will insure whom?If you throw money in, will it protect you from death, or will you protect it from falling?
The director didn't trust the bank, so he put a lot of cash in the safe. It reminded me that many people put money in the safe of the bank.I remember that about 30 years ago, the safe of a bank customer in New York’s Chinatown was blasted by a thief during the Lunar New Year, causing heavy losses.The culprits took advantage of the cover of the Chinese New Year's firecrackers and gongs and drums to gouge a hole and sneak into the safe.I still remember that in 2004 a safe in a bank in New York’s Chinatown was also ransacked by thieves.Moreover, a bank in the Chinese-inhabited area of New York also suffered this misfortune one or two years ago.Out of the Chinese community, burglaries in bank customer vaults have also been heard from time to time.One of the things that impressed me the most was that a thief climbed up to the ceiling in the bank toilet and hid it, waiting for the banker to come out after get off work, and did not touch the anti-theft system of the bank's doors and windows.
Everyone should know that the bank is not responsible for compensation for the burglary of jewellery and money in the bank safe.So many people hide cash at home, but it may be burned by fire, or stolen or snatched by thieves.One of the reasons I have clients ask me to buy insurance is that when I go home, I will uniform the robbers in the garage and bundle them up, and all the valuables in the house and tens of thousands of yuan in cash will be searched.They said, it’s better to put the money in life insurance, not only getlife insurance, Long-term gains are also good, and interest and appreciation during the accumulation period do not need to be taxed.Of course, they know that the financial status and claims handling capabilities of the insurance company I recommend are the highest level of "explosion and fire resistance".
(Author's statement: The content and views of this article only represent the views of the author, and have nothing to do with any insurance company, newspaper, or media. The author is solely responsible for the article.)
