No Fire Insurance After the Fire Has Started
How many times have we used the fire insurance analogy to explain why you shouldn’t be able to buy health insurance to cover an illness you already have? Turns out there is a real world example. David Henderson has a post this morning about a Salon story:
About a man who failed to pay an annual fee for fire protection and then, when his house caught on fire and he called the fire department, the fire department refused to show up.
Turns out, the Salon writer, Alex Pareene, intended this example as an attack on libertarians. [No one else would be so cruel!] But David discovered that:
The fire department in Tennessee was not a private for-profit fire department. It was a government-run fire department. You read that right: the fire department that refused to show up and refused to name a price at which it would show up was run by the government of South Fulton.
My hat goes off to the fire department for refusing to put out a fire. That’s they way it works in the real world. Who knew that moral hazard was so flamable?
If the fire department was not a government run monopoly, there would have been competitors if one company refused service. Also, it would have been in a private company’s best interest to provide services to unsubscribed member of its services, at a higher fee. Don’t let them get away with blaming this on a free market.
I wonder how many rural residents that had not paid the annual fee quickly sent in a check after hearing that South Fulton would not respond to charity pleas from free-riders?
Love the hot topics you find! While this may be a watershed event for the residents of Fulton who don’t want to get burned by their firefighters, it’s also the perfect answer to the heated debate over guaranteed coverage. This should spark a few more comments….
Attila, makes we want to fire off a rebuttal. And unleash a few simmering thoughts.
This is getting me all fired up.
Great write up on this at: http://treygivens.com/?p=2368
This is definitely not any kind of capitalism at work. This is government at its worst.
You need to reread Plutarch. In ancient Rome, Marcus Crassus ran the private fire department. When they arrived at the fire, you first had to sign over the property at a tiny fraction of its actual value otherwise they would let it burn.
Obviously the stupid fire department has never had their own house burn down, because if they did they would have put it out and even if their house didnt burn down they should have put it out anyways as its the right thing to do!
My house burned down two years ago this thanksgiving and as i watched my house burn (even though fire fighters tried to put it out) it was the most herendous scene i have ever seen. Its not fair to let someone lose everything that they have!