The Insurance Group
The comments of Donna Jo Shaffer, November, 2004, have been helpful
Insurance is a means for a community to reduce the financial devastation caused to any one member due to harmful events that all face. In its most simplistic form, insurance is a social contract that allows the losses of one to be shared among the many.
The key concept is that the group (not the individual members) assumes the risk. The contract is not one that each member makes to every other member but one that each member makes with the group. The law now governs this contract, and this actually simplifies the system and ultimately the requirements of the individual community members.
Of course the group must not only recoup the money paid out but must also be sustained by their efforts. The 3 most common ways of achieving financial sustenance are by
- charging members a premium for the service (resulting in each individual paying more than in the original social contract,)
- investing the money taken in (resulting in each individual paying less) and
- using lapsed policies of rented insurance (e.g., a term life policy that someone pays on for 5 years and then discontinues)
A profitable insurance group can reduce the cost to each member of the society below that of the original social contract. This accomplishes:
- more members of the society can afford insurance (and therefore withstand the financial hardship presented by a given risk). This increases the society's resilience and thus it's ability to thrive
- more members can afford to offset other potential risks - increasing the general financial wealth of the community by protecting its assets.
A core requirement is that there be an ethical insurance group. Without ethics the entire system breaks down. With ethics, the system thrives, grows, and strengthens and creates opportunities for those who would not otherwise have them. It allows a sustained response by groups of people to an unending known set of diverse challenges and stresses. Rural people know these stresses, only they do not know the timing or the amount or the individuals or families that will confront them. Insurance is one way to help sustain rural communities, their people, and their progressive management of their lands.
The needs for all types of insurance by people within the rural community are abundant. We believe that by a diverse approach to these many needs, by membership incentives, by awareness that some gains are devoted to Rural System success, and that new ways for reducing costs are offered, The Group can flourish and have significant impact on the successes of Rural System. It's objective is improving financial and risk-taking conditions for rural people.
The Group over time writes about and develops the concept that investing and holding in insurance is a valid positive land management approach. Failing to have insurance makes families of people in crisis or after a death to break land use plans, to exploit land, to "clearcut" for apparently-necessary short-term financial needs. Insurance gives them time, some perspective, and reduces the needs for such actions. When widely owned and encouraged by the community, the advantages go to the group as well as to the individuals.
The key concepts...
The group has an office with Rural System and gains contacts as well as diversity of work and experience and economic gains (salaried or wages).
- A proportion of profits, those increased and made more constant and from diverse sources, contribute to the total financial success of Rural System.
- Affiliation with other agents and companies is encouraged. It addresses policies (once available via the National Wildlife Federation) dealing with:
- going to and from a hunting, fishing, or hiking trip
- engaged in sport of skeet or trap shooting
- engaged in sport rifle or pistol matches
- engaged in official field trials (including transportation
- engaged in archery at ranges or while bow hunting
- engaged in recreational boating
- (probably excluding suicide, hernia, intentional injury, poison from snakes, insects, or vegetation)
- Working with Safety and Security the group develops a safety program (educational and home and land-ownership inspection) that, when successful, gives insurance buyers a reduced premium (like driving safely or not smoking).
- Working with the Fire Force, fire insurance is offered and incentives developed.
- Working with charitable groups, care for people suffering from fire is offered.
- Available insurance for landowners protecting them from recreation-related suits is made available.
- Forest fire, wildfire, and prescribed fire damage insurance is offered.
- Vertebrate pest damage insurance is offered.
- Vehicle insurance is offered through the 4 x 4 Group and Belles and Whistles.
- Conventional employee insurance is offered and alternative strategies sought for desired coverage and controls.
- Hunter and recreationist insurance is studied and pathways developed.
- Special insurance is investigated for horseback riders and for those who pasture and care for horses.
- Works with others to reduce insect and plant related diseases (as related to insurance rates, human medical insurance costs, and mortality).
- Crop, hail, etc. insurance is studied and offered.
- Documents are written and sold on rural-related risks, risk aversion, and rational treatment of risk in agricultural decisions
- A simulation of the effects of groups and individuals having insurance on desirable land use is created and described.
- Workers compensation programs for injuries, etc. are developed including feedback procedures.
- Insect damage (e.g., pine bark beetles) is studied and potentials re-developed for insurance companies as well as tree growers with the concepts of Heikkenen
- Flood insurance is studied and strategies developed with the Corps of Engineers and other state and federal and local agencies related to flood plains.
- Develop new products for the elderly people of the rural communities, providing computer-produced reports helping understand personal as well as government aids for their financial well-being.
- Provide investment options as related to insurance and rural interests.
- Find a potential for a small portion of "profits" from Rural System total resources to be invested in insurance for members, thus giving further incentive for them acquiring insurance. Arrange a program for death benefits to flow to Rural System when appropriate.
- Work with others to develop sophisticated computer produced investment plans and programs for individuals and groups (the 10-20 memberships within Rural System) both for their well being as well as for gains to the Group and to Rural System
Develop further the chi-concept for citizen health and implement it, including working with Tech to link insurance-related human mortality and thus life expectancy to healthy-eating/dieting..thus with insurance premium effects and payoff effects.
- Study Mishra, Pramod. 1996. Agricultural risk, insurance, and income. Avebury, Old Post Road, Brookfield, VT 05036-9704 USA, 300p.
|Last revision: November 23, 2004