The American revolution against private corporate governments

February 09, 2001

By AHRC News Services
Copyright 2003 AHRC News Services

In 1990, Richard Louv stated in his work America II:

"Sometime during this decade, the shelter revolution will be complete. It will have happened quietly. No shot will have been fired, but the American notions of private property, privacy, local government – and that part of the American dream symbolized by the single-family suburban home – will have been permanently altered."

Part of his prophecy has definitely come true. Over 45 million Americans now live in common interest developments (CIDs) governed by homeowner associations. This form of housing is growing rapidly in places like England, and has spread to other countries such as China and Indonesia.

Another part of his prophecy has, tragically, not come true. Shots have been fired in a way that he probably did not even imagine. In Arizona, a homeowner who believed that a homeowner association had mistreated him, broke into a homeowner association meeting with guns blazing, killing 3 and wounding others. In Michigan, shots were fired by another homeowner.

But the shots have not just been physical. Around the country, homeowner after homeowner has raised his or her voice against the abuses in homeowner associations and against the very concept itself. In Texas, Florida, New Mexico, Arizona, California, Oregon – just to name a few – homeowners have organized to fight this new form of private government which lacks any significant checks and balances.

They have documented in great detail how what they term as the parasite industries – lawyers, management companies etc. – have bribed politicians to create a regulatory structure that acts as a cash register for these interests.

In the course of their investigation and analysis of CIDs, homeowners around the country repeatedly came across a common thread, Chubb Insurance. They found four things.

1. Chubb Insurance had a monopoly on insurance for homeowner associations – reportedly, over 80% of the market.

2. In investigating how Chubb had gained this monopoly, they discovered that Chubb did so by promising to defend boards of directors whether they were in the right or the wrong – and promising them $100,000 in Accidental Death and Dismemberment Insurance for only $100 a year.

3. Chubb used its legal muscle to club any homeowner who dared to challenge the illegal actions of boards. In Texas, Chubb told one homeowner that it was willing to spend $1 million to fight his lawsuit against his board.

4. Homeowners, however, discovered a more ominous piece of information. In some cases, Chubb by reason of its multi-billion resources and legal muscle, was able to prevail over a homeowner, and then came after the homeowner for legal fees. If the homeowner could not pay these fees - as was generally the case - the homeowner would lose his home in foreclosure.

The result of all this is that owning a home in a CID has become an actual nightmare for many, and a potential nightmare for everybody. At a daylong legislative hearing in October 2000 in Las Vegas, homeowner after homeowner recounted stories of corruption, abuse, loss of homes and the denial of constitutional rights. Many pointed out that if Chubb did not bankroll boards and lawyers, most of these cases would not occur.

In recent months, investigations by homeowners of other Chubb activities, have turned up further disturbing information. They discovered that the popular PBS program, "The Antiques Road Show", is financed by Chubb. They found the reason for this in a 1996 statement by Chubb to its investors:

"We believe that we are the largest insurer of fine art, antiques, jewelry, heirlooms and other collectibles in the country – and the world. Personal insurance premiums now exceed $1 billion, and we expect them to increase at an attractive rate through the balance of the 1990's."

Chubb uses the Antiques Road Show to sell its insurance. Thousands flock to these shows and are given appraisals of family treasures – and the pitch that they should insure these with Chubb.

Many question whether the public airwaves should be used in this manner to market and sell insurance – especially when, in the related homeowner association arena, they are causing so much suffering to so many. Voices are being raised that entities such as PBS – which are funded by taxpayer's money – have an obligation to examine whether sponsors of its programs are living up to the standards that the public trust requires – and that those sponsors who do not, should be terminated.

Research shows that Chubb has moved heavily into countries like China – where homeowner associations are growing. Chubb paid former President Bush $1 million to help it to secure an insurance license in China. As globalization affects all areas of life, homeowners in America are trying to caution other nations that they should not unwittingly accept things such as common interest developments without first thoroughly investigating the hidden hands that lie graspingly within them.

As this phenomenon spreads across the world, they warn that a person's most precious possession – his home – is being gobbled by the hidden hand of powerful economic interests – and that one of the biggest of those hands is Chubb Insurance.