03-06-2021, 06:35 PM
I can't speak towards this particular issue, but generally speaking, having private insurance doesn't preclude somebody from collecting other benefits like a buy out. The reasoning behind the concept goes back hundreds of years, but it is based on the idea that insurance is a type of "pre-payment" towards a financial loss, not an entitlement. For example, property owner "A" has paid $1000/year homeowners insurance for 40 years and their house is taken out by lava. Property owner "B" has never had insurance. Are they going to reimburse property owner "A" extra for paying $40k insurance premiums over the years to make them "whole" compared to "B"? Similarly, if you get into an accident and the insurance company gives you $10k, the money is not treated as income and is not subject to taxation. The same usually applies to a $1 million life insurance policy. During the "cash for clunkers" program they could accept any vehicle that was driven in (subject to other rules) even if the owner had been paid an insurance claim on it.
Private insurance is a separate financial contract between two consenting parties, the government doesn't know the terms of each individual contract, the premiums paid over the years, the payout amounts, etc, nor should they necessarily discriminate on a person based on whatever business relationships they made to protect themselves. Because once they go down that path, how far do they go? If somebody died because of the lava on their land and the family gets a life insurance payout, does THAT mean they don't get a reimbursement? No. Whether or not the person had insurance or not is really none of the government's business. If they are going to buy out properties they need to do it on the basis of what the person was being taxed at, and not take into factors of whether they were paying premiums to protect their financial interests or not.
The government doesn't care if you can't pay your taxes because your insurance premiums are too high. They will take your property. Likewise if they are buying out properties, they shouldn't look at whether or not you had insurance on it.
Look at it the other way. If your property was taxed at $200k and that is what they pay you, what if it's worth $500k after the eruption (far fetched, but let's say now it's on a new black sand beach), they aren't going to offer you an additional $300k. You either take the deal (and the loss) or not. If you had insurance, maybe you break out even. They don't, and shouldn't care.
Deal, or no deal.
Private insurance is a separate financial contract between two consenting parties, the government doesn't know the terms of each individual contract, the premiums paid over the years, the payout amounts, etc, nor should they necessarily discriminate on a person based on whatever business relationships they made to protect themselves. Because once they go down that path, how far do they go? If somebody died because of the lava on their land and the family gets a life insurance payout, does THAT mean they don't get a reimbursement? No. Whether or not the person had insurance or not is really none of the government's business. If they are going to buy out properties they need to do it on the basis of what the person was being taxed at, and not take into factors of whether they were paying premiums to protect their financial interests or not.
The government doesn't care if you can't pay your taxes because your insurance premiums are too high. They will take your property. Likewise if they are buying out properties, they shouldn't look at whether or not you had insurance on it.
Look at it the other way. If your property was taxed at $200k and that is what they pay you, what if it's worth $500k after the eruption (far fetched, but let's say now it's on a new black sand beach), they aren't going to offer you an additional $300k. You either take the deal (and the loss) or not. If you had insurance, maybe you break out even. They don't, and shouldn't care.
Deal, or no deal.