Is a Penny Saved a Penny Earned?

Benjamin Franklin told us "a penny saved is a penny earned."

Maybe.

Three years ago, during the budget process, Oriental's town manager briefed the commissioners (I was one of them) on increases in various insurance premiums. One of the expenses was (as I recall) about $900 for flood insurance. We discussed the option of self-insuring on the grounds that during hurricane Isabel, the highest storm surge in anyone's memory, the only loss was the carpet. Two or three years' premiums would more than cover such a cost.

We deliberated and decided to self-insure for flood loss.

Hurricane Irene confounded our expectations. The storm surge flooded Town Hall about a foot deeper than Isabel. There was quite a bit of damage.

Some of the damage would have been covered by flood insurance. Some would not. Mold, for example. Some damages would have been reduced by depreciation. It would be good to do a careful calculation of the benefits we would have received from flood insurance against the expense we avoided by self insuring. The board might or might not want to reinstate flood insurance.

As Yogi Berra said, "it's difficult to make predictions, especially about the future."