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Indybay Feature

Protest Against Legalized Insurance Blackmail

by Leon Kunstenaar
How insurance companies profit by worsening the climate crisis.
How insurance companies profit by worsening the climate crisis.

Photos: Leon Kunstenaar

(San Francisco, June 26) - Back in the bad old days the local gangster boss would send his goons to neighborhood shopkeepers to tell them what a shame it would be if someone were to send a brick through their shop window. They would then offer them "insurance" or safety from this for a monthly fee. This is the "protection" racket, a standard feature of gangland activity for many years.

The protection racket is alive and well today. However, it is different in that it is legal and is the main business of large respectable corporations like Chubb, AIG, Citibank, Wells Fraco, etc. But the system is the same. Those offering insurance to mitigate the risk are exactly those who are causing the threat. The correct term for this is blackmail.

Overdraft "protection", is a "service" offered by most banks. The customer pays the bank to not charge "penalties" that the bank itself imposes. It would not be unreasonable for the bank to lend the customer funds (at interest) to cover overdrafts but by framing the charge as a fee, the enormous actual interest rate is hidden. For example, a ten dollar fee for overdrawing an account by $100 dollars for a week becomes an annual rate of 520 percent. Wells Fargo still has overdraft fees of $35 which, in the above case would be an annual interest rate of 1,820 percent. Large banks are also major fossil fuel industry lenders.

Yet this is trivial when compared to the planetary scale blackmail perpetrated by the insurance industry. They take the money homeowners pay for fire insurance and use it to fund insurance for the fossil fuel industry. This allows the fossil fuel industry to operate, even expand, thereby enabling more fossil fuel consumption. The expanding fossil burning worsens the climate crisis, increasing fire risk throughout states like California. The increased risk is then used to justify ever increasing rates for homeowners. Often, policies are canceled outright, forcing homeowners into the last resort FAIR program. This allow for even more massive rate increases. Since insurance companies "participate" in the FAIR program, insurers still get the money and profit even more.

Climate activists are on to the scam. They gathered in from of the One Post Street offices of Chubb, a large insurance company, with large banners and signs demanding that our future, not oil and gas, be insured. Some were climate scientists in their lab coats in the action characterized as a teach-in. Narratives of long time retired homeowners priced out of their homes were told. Flyers were distributed to passers by and messages were chalked on the pavement.

Activism on this issue is not going away. A major action against Citibank is the works.

See all high resolution photos here.
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