Society without Police: Insurance Jargon, the BLM Surcharge

Vicar the Reverend Morrison: It’s about this letter you sent me regarding my insurance claim.

Mr. Devious: Oh, yeah, yeah – well, you see, it’s just that we’re not…as yet…totally satisfied with the grounds of your claim.

Vicar the Reverend Morrison: But it says something about filling my mouth in with cement.

Devious: Oh well, that’s just insurance jargon, you know.

Monty Python’s Flying Circus The Buzz Aldrin Show 1970

The latest in a series of post concerning the removal or the de-funding of police departments and the unintended and/or unconsidered consequences thereof.

One of the hidden costs in every product you buy is the cost of insurance.

Every product you buy online, every time you go to a local store, every time you buy a gallon of gas at the pump or eat at a restaurant (although you likely haven’t done that lately) part of the price you are paying for an item or service include that cost that the shipper, the business owner, the manufacturer paid for insurance.

The insurance business is a lot like the casino business in the sense that it’s all about the odds. In life insurance you look at the numbers concerning life expectancy adjusting for factors such as smoking, flying disease and set your rates accordingly (it’s no coincidence that as life expediency went up near the end of last century ads for life insurance without a medical exam for those 50-80 were everywhere). In collision insurance you calculate the number of fender benders you are likely to have to pay out and base your rates on those odds.

When it comes to business property there are many things to consider. How likely is a robbery, how likely a broken window, how likely a fire, how likely a package will be stolen from a stoop after delivery. All of that is figured into the price a business must pay for doing business.

Now take that batch of risks, and add to that the risk of doing business in a city with either no police or a de-funded police department.

How do you factor that into your price?

Well if you are a small business or retailer you might will find the cost of such an increase prohibitive and not even bother to try. What about the big guys?

Well if you are a business like Wal-Mart you can lean on a mayor to make sure she gives you preferential tax treatment or incentives to stay:

“Mayor Lightfoot said she was on a conference call with Walmart and other major retailers that had stores looted or heavily damaged during the unrest in Chicago. She said she pleaded with them to not abandon Chicago.”

Or you might decide it isn’t worth it at all to reopen and move:

Some may shrug at Wyrobek’s declaration and say that it’s just 50 jobs, but Wyrobek isn’t likely to be alone. He just has the distinction of being the first to go public with his decision to leave, and the reasons for doing so. How many business owners in Minneapolis might decide that the risk of a repeat is just too high, and that the track record of city leadership represents a bad risk?

For that matter, some businesses might not have the ability to reopen in place even if rebuilt. Insurance losses in the riots will go over $500 million, and customers in Minneapolis will have higher rates as a result of the suddenly-exposed risk of doing business in the city. For some businesses, that might be too much of a hurdle for reinvesting in the city.

But move or stay the cost of either that lost tax revenue or extra insurance will be passed on to you. But it goes deeper than that.

Let’s say you don’t go to stores, What happens if you are in Chicago or Minneapolis and decide to go all in on Amazon?

Well we’ve already talked about the return of the shotgun driver carrying a real shotgun but lets go one step further.

If the police are unlikely to respond to a truck or UPS truck getting hit how much less likely are they going to worry about porch pirates?

Now if you don’t get your package you might call amazon and they may say that their responsibility ended when it ended when it was delivered or they might consent to replace it, in fact the cost of such a replacement is likely factored into the, but what happens if you live in a city that has no police and / or defunded police and the cost of such replacements become prohibitive?

Well I suspect you will see and extra charge for such cities call it a black lives matter surcharge, assessed to cover packages lost in those cities because nobody is afraid of getting in trouble for taking them.

But let’s go one step further. Let’s say that BLM decides that such a charge is “racist” and that penalizing residents of such cities over it is also racist. In this politically correct world a business might not want to be tagged so.

In that case if you’re amazon you introduce optional “insurance”. For a small fee if your order is lost or stolen then it will be replaced at no further charge, BUT if you don’t select that option Amazon or any other online retailer might elect to take no responsibility for any package once it’s delivered to that address.

Now I’m sure that our friends on the left might not be pleased about paying this likely new surcharge, but that’s OK, with the higher rates they’ll pay for car insurance, homeowners insurance, renters insurance if they don’t own a home and of course the higher rates on loans as if you live in those cities you’re a bad risk, I’m sure they won’t notice a few more dollars paid for a package from Amazon.

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