The welfare state does not insure your business
The ‘everything for free so that I can spend my money on balavostri’ mentality has reached the extreme where there are people who don’t understand that the welfare safety-net goes hand-in-hand with private insurance. They are not mutually exclusive.
The state is not there to save you in every respect when you fail to save yourself, but only at the most basic level. It ensures that you don’t starve. It ensures that you get to sleep under a roof. It ensures that you get medical treatment and your children get schooled.
But it does not insure your home or your business. That’s up to you to fix, using your own money.
Last month’s rainstorm drew out of the woodwork some of the most surprising people who don’t seem to know the intrinsic reasons why the state should and does provide medical care and schooling, but should not and does not insure your house and contents or your business premises and stock, and without charging you a premium.
Labour MP Marie Louise Coleiro actually asked the finance minister, in parliament, whether the government would consider giving financial aid to people whose homes and businesses in Qormi were damaged by rainwater flooding.
The finance minister’s circumspect reply was that the government does not cover risks which are normally assumed by insurers. This was not the sharpest possible phrasing and it is also inaccurate, because the government does cover such risks in medical care, and very comprehensively, too.
But let’s hope Mrs Coleiro Preca got the meaning anyway: the government is not there to insure your furniture and your stock of coffins.
Next up was the man with the 800 floating coffins which mysteriously disappeared after breaking out of his Qormi warehouse in a sort of macabre version of the animated film Chicken Run, featuring caskets instead of chickens.
Were 800 coffins or their remains found scattered about when the waters receded? No – we just saw the one, bobbing along on YouTube. But he tells us that 31 were picked up from various spots. Let’s leave aside any questions as to whether this undertaker had swallowed the hype about avian flu and stocked up in eager anticipation. This is what interests me: why didn’t he bother insuring those coffins and why does he now expect the taxpayer to make up for his negligence?
It is understandable that he is distressed at what has happened. Even if he were insured and able to submit a claim for compensation, the disruption to his business, and the psychological pressure which that disruption creates, are great. But the difficulties he faces now go way beyond disruption, and the stress they engender is exponentially greater.
He must pay for repairs and replacements himself, using his hard-earned profit or taking a loan and paying interest, which means that his financial losses are considerable. He could have spared himself all that by including business insurance among his routine overheads. But he didn’t – and he wasn’t even embarrassed to tell newspaper reporters that he hadn’t bothered to do so, that he had 800 coffins just sitting there uninsured.
The undertaker told The Times: “I’m still waiting for the surveyor to see how much money I have lost”. Perhaps the undertaker has engaged the services of an independent loss adjustor to prepare his claim against the state for allowing his warehouse to be flooded by rainwater.
But I think not. Anyone who is so stingy about paying a relatively small annual premium to insure himself against having his business practically wiped out is not going to pay a consultant loss adjustor to work out how much he has lost.
The surveyor of whom he spoke is almost certainly the one being sent under terms of his motor insurance coverage, to assess the damage to the 12 vehicles that were garaged among the coffins. And the only reason those vehicles are insured is because automobile insurance is mandatory and you can’t get a tax disc for your windscreen unless you produce your insurance certificate.
I can understand people who don’t bother with private medical insurance – I don’t, for one – because the service provided by the state is actually of a higher level and certainly more comprehensive than that provided by the private sector. And routine check-ups at private clinics are not that expensive anyway. They certainly cost less than the annual premiums for medical insurance. But I cannot, for the life of me, understand why people don’t insure their home, its contents or their business and stock.
Unlike with medical care, there is no state-provided alternative. If your home is burgled or damaged in a storm (or, as with ours, by arson), and you are not insured, you lose not only what has been taken or damaged, but also the cash liquidity which you must use to pay for replacements and repairs.
If your home is not insured and it is damaged by an indentified third party, as with that family in Naxxar whose neighbour kept fireworks in his garage, then you will have to file a civil suit against that third party for compensation. It will take years to get a judgement and at the end of it all, he might have nothing to pay you with.
If you are insured, your insurers compensate you more or less immediately and then pursue the third party themselves.
It is understandable that the undertaker should be distressed, but he is projecting blame outwards when he should be directing it inwards. If he is the hapless victim of anything, it is of his own negligence.
Leaving a warehouse full of hundreds of wooden coffins uninsured is primitive madness. This time it was rainwater. Next time it might be a smouldering cigarette stub carelessly tossed aside just before closing-time.
As somebody who espouses liberal politics, I believe that people should be left at liberty to leave their homes and businesses uninsured, unless there is risk to third parties (which is the reason why third-party coverage for cars is mandatory).
But this freedom to leave your home and business uninsured is directly linked to the obligation to pay for all ensuing damages yourself, rather than clamouring for compensation from others who are not responsible for the results of your freely-made choice not to pay an insurance premium.
This article was published in The Malta Independent yesterday.
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There’s more than one coffin here, but still far short of the 800 claimed.
http://www.youtube.com/watch?v=muqhj4RPDjs
Reminds me of that chapter in ‘Zmien l-Ispanjoli’ when Guzé Galea describes the great storm. Spanking good read.
R.I.P – Remember Insure Property.
That’s a good one…
This mindset is similar to the ‘bankruptcy’ of Price Club. At the time, the Labour Party also put pressure on the government to intervene and save Price Club from bankruptcy. It turned out to be more complex than a simple bankruptcy.
800 coffins! Was this stock for 20 years or for 20 weeks? Perhaps they should have a look at his income tax and VAT returns.
On the other hand, this man might sue the Government for bad planning. But that would be a case of damages not of insurance policy – as you rightly point out.
“routine check-ups at private clinics are not that expensive anyway”
Routine check-ups are not covered by health insurance policies. You would have to pay anyway, with or without insurance coverage.
Coverage for routine check-ups may sometimes be bought as an extension on your policy, depending on your insurance provider. Then again, there are some insurance companies (usually foreign) where such cover is included in the standard policy.
Issa mhux imur ghand Dr. Anglu Farrugia u jiftah kawza ohra kontra l-Gvern. Dak ghasel tinzillu basta kontra n-Nazzjonalisti.
Quite rightly he should.
Oh, come on! There are corner bazaars which are covered by an insurance policy.
I feel sorry for this undertaker but he must be mad.
I assume his coffins are made of wood.
Anyone who does not insure a quarter of a million euros worth of wood against fire, at the least, is in need of urgent help.
He could at least have picked up the damaged coffins and chopped them up to sell them for firewood. 800 coffins would have been enough wood to serve a household a few years.
I’m watching the Xarabank debate. I’m sorry to say this and worried, really worried, about the low level (and dangerous) language used by Joseph Muscat.
Calling the prime minister ‘GIDDIEB’ , interrupting, shouting and behaving like an unruly schoolboy is not material for a prime minister.
[Daphne – I really don’t know why you’re so surprised, John. One of my abiding memories of Joseph Muscat is from the 2003 election/referendum campaign: one of those Broadcasting Authority press conferences in which a party leader is interrogated by journalists. Muscat was one of the ‘reporters’ grilling Fenech Adami, who maintained his dignified composure while Muscat screamed at him ‘Giddieb! Ghid lil-poplu Malti x’ se jsir minnu jekk Allahares qatt insiru membri tal-Unjoni Ewropeja! Giddieb! Giddieb!’ He was vile. I kind of knew at that point that Labour was going to lose, and when Muscat’s boss Sant behaved in exactly the same fashion during the final BA debate between the two party leaders on TVM, I was pretty much certain – though I still worried like hell, of course. I share your shock, though, that Muscat hasn’t made the mental or intellectual transition from Super One reporter to leader of the Opposition at all.]
Joseph Muscat told us to drop the “Doctor” and just call him Joseph, now I can understand why.
I pity Dr Gonzi, who looks hurt at having to face this ordinary guy.
By stating that the car registration refund case is “a won case” isn’t he putting pressure on the magistrate?
Daphne, what about Joey’s insistence that he will refund tax on cars even though the law courts do not uphold Labour’s claims? Insisting on rectifying something that our highest institutions say was correct in the first place – at the expense of the taxpayers – just because Joey says so – isn’t this a scandal?
Won’t this be a case where those who did not afford a new car will pay for those who do? Socialist ideology at its best!
We need one of your articles about this subject!
[Daphne – I wrote about it at the time.]
Daphne you forgot to mention one point: What if all residences and businesses in Qormi were all insured ? Do you think the insurance company would stand still and pay for all damages ? Hell no! The insurance company would sue the government for damages.
[Daphne – I don’t think you understand how insurance works.]
Another thing… what about insurance premiums for such businesses/residences? For every flooding they get (and they happen very often in those areas believe me) the premium goes up. Do you think this is fair?
[Daphne – Yes, it’s fair. It’s the same with your car insurance. Premiums are calculated on the basis of risk. That’s what insurance IS.]
Do you think Tonio Fenech can shed responsability to all this with a simple statment?
[Daphne – He is not responsible. You, as a home-owner, are responsible for insuring your own home. When racist maniacs set fire to our house, we didn’t sue Norman Lowell for damages. We filed an insurance claim, because our home is insured. We did the same when we had rainwater flooding some years ago.]
The focal point of all this argument is that floodings like the one we just experienced can be managed/prevented unlike other natural disasters like earth quakes/ tsunamis/ hurricanes. This is where the government’s responsability comes in.
So your argument does not hold water and yes the government is ultimately responsible. Tonio Fenech’s statement is sheer arrogance from an immature minister.
[Daphne – The government is not responsible. You might as well sue everybody in the area who doesn’t have a well (read the report in The Times today). That is poor reasoning which begs for the rejoinder: who told you to buy a house there in the first place?]
You were right about the 800 coffins. I saw only one.
Too many cowboy entrepreneurs – any type of insurance is an unnecessary overhead which one can do without until the heavens open and all hell breaks loose.
When they apply for bank facilities and the bank asks for property insurance, fire/theft cover over stocks etc, they get the shock of their lives at money being thrown down the drain.
Watching Muscat yesterday made my stomach turn. He is a photocopy of Alfred Sant. Remember when Sant use to talk about the salaries of ministers? Then when he became prime minister he raised his own salary and those of his ministers.
Muscat called Dr Gonzi giddieb, imma xi tippretendi mit-tifel ta’ Salvu id-Doggie.
He has no class or style. He went to St Aloyiuos for nothing. Tuba kien u tuba baqa, u zattat.