Quote:
Originally Posted by outlaw
Wait a minute. YOU raise some venture capital, and I'M in. Just kidding. Actually, I would be happy to join a co-op, but I am past looking for a money maker. I'm now in spending mode. I do wonder what we are not considering, though, since I assume the developer has already looked at this and determined that it isn't a money maker.
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I would assume that not only the developer but all the insurance companies have already looked into it. There may be legislative and regulatory risks and costs that are hard to quantify. There may be public perception risks, such as "this should be included in my policy already, why do I have to pay more" or some such nonsense. The nature of sinkholes is somewhat random so there could be a risk of getting hit by far more than the expected number of claims. If that is the case, the regulatory risk would be a law passed that requires a huge amount of money being held in escrow to cover that unlikely scenario, much the same as the PBGC (Pension benefit guarantee ) requires huge reserves to cover adverse market conditions. Remember, insurance cos. don't gamble, they only offer a sure thing (for them). Then there would be the cost of more adjusters, more arguments of whether it is really a sinkhole or some microscopic depression in the ground, the inflated cost of repairs once the contractors know it is covered by insurance, etc.
All in all, I'm in the spending mode as well. On the other hand, MY idea, YOUR capital works fine for me LOL
