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Isn't one theory of granting a government monopoly franchise that it allows pooling of risks related to that activity? PG&E is, in some sense, the government's
by Digory 8y ago
Isn't one theory of granting a government monopoly franchise that it allows pooling of risks related to that activity? PG&E is, in some sense, the government's insurance plan.
Other general liability insurance is now priced for damages that cannot be assigned or recovered. But "no fault fire insurance" would shift cost from the government-backed-utility-rate-pool to private insurers.
It's hard to imagine that such a shift would be more efficient, in part because PG&E is in the best position to assess its own risk -- and buy its own insurance and reinsurance.
Surely, somewhere in the utility, someone bought a SwissRe or Loyds policy against freak catastrophic loss.
- michaelt 8y agoIt's hard to imagine that such a shift would be more efficient There was an article linked here the other day [1] that said homes can be designed to withstand wildfires through choice of materials and vegetation clearing. If the intervention you want to incentivise is replacing wooden roofs and removing fuel near the house, raising insurance bills for people who don't do that could be one way of doing it. Of course, there's also a case for incentivising not starting the fire in the first place. [1] https://99percentinvisible.org/episode/built-to-burn/ https://99percentinvisible.org/episode/built-to-burn/