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In the US, flood insurance is provided by the government. And the premiums still jump insanely sometimes. It gets handled this way for the same reason our gove
by Mz 9y ago
In the US, flood insurance is provided by the government. And the premiums still jump insanely sometimes.
It gets handled this way for the same reason our government provides welfare et al: it makes no sense as a business, but the cost to the nation to do nothing is a bigger problem.
- cmurf 9y agoThere is some private flood insurance these days, but I don't know who offers it, in what locations, what the premiums are, and what kinds of exclusions there are. Since it's a new thing, I think the claim that it'll be vastly better than NFIP is invisible hand waving. Nevertheless... http://www.insurancejournal.com/magazines/features/2017/07/10/456390.htm http://www.insurancejournal.com/magazines/features/2017/07/1... I think the bigger issue is that there is an inherent incompatibility between free markets (or strict laissez faire, non-intervention of any kind) and democracy. Of course people, in the millions, are going to say "help us" and direct it at their various layers of government, and punish those who don't at the election booth. Therefore it stands to reason in major floods like this, that everyone is going to get some kind of relief even if they didn't have flood insurance. What I'm not sure of is whether the insured get 100% payouts and those not insured get partial payouts? What's the incentive to have flood insurance, except in smaller, localized, 50 or 100 year floods? This is asset destruction and the only way to properly handle it is through savings. So it's either made compulsory or you do end up with something of a free loader problem. Whether that free loader problem is a real problem, I don't know.