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If hurricane insurance becomes impossible to acquire for a region, will banks stop giving out mortgages because they require homeowner's insurance in order to l

If hurricane insurance becomes impossible to acquire for a region, will banks stop giving out mortgages because they require homeowner's insurance in order to lend? Are banks legally required to offer mortgages to suitable candidates, regardless of region? I would prefer that my bank, my insurance company, and the government duke it out amongst themselves, and not involve me. Central FL doesn't see nearly as much hurricane damage as the coast, but we are also being subjected to increased premiums.

911e 3y ago
This is quite interesting, I feel like at some point we need to cut those middleman that bail out as soon as paying is involved
- SoftTalker 3y ago
  They aren't in business to give away money. Insurance is all about paying to mitigate risk. If the risk of loss increases or becomes too hard to predict, insurance will get more expensive or simply not be offered.
  - alwaysbeconsing 3y ago
    There's no inherent reason it must be a profit-making business. Organizeing as a cooperative, mutual insurance is also an option. Granted that any version still must set rates that cover expected payouts.
    - itiro 3y ago
      You’re describing government. People cooperate through government to insure stability. I will never understand the endless linguistic indirection when in the end it’s all Soylent Green; just people.
      - pauldenton 3y ago
        [flagged]
      - fluoridation 3y ago
        Are you saying that whenever people cooperate voluntarily, it's a government?
    - JumpCrisscross 3y ago
      > no inherent reason it must be a profit-making business Insurance is an extremely demanding business. This isn’t something you can throw commodity drones at. If you’re willing to create a coöperative job that pays millions to its actuaries and risk managers, fine. Most don’t. Hence why a profit-based model works: it can incentivise the people that are needed for it to work in the long run to do the job. (In the short run, anyone can run a sloppy insurance operation.)
      - bonestamp2 3y ago
        One interesting experiment in this area is the Canadian Province of Saskatchewan, where the government has run a break even auto and property insurance organization since 1945. It does not receive money from the tax payers and is completely self sustaining: https://en.wikipedia.org/wiki/Saskatchewan_Government_Insurance https://en.wikipedia.org/wiki/Saskatchewan_Government_Insura...
        bonestamp2 3y ago
        Aside from being non-profit, an additional benefit that makes this model more cost effective is that you don't have insurance companies suing each other because everyone has the same insurance company.
    - tpmoney 3y ago
      Mutual insurance companies exist, presumably they are also bailing in places where the cost is unsustainable.
Guvante 3y ago
I know when I bought I had to have a quote for appropriate insurance policy in order to close. I never asked what appropriate was however.
- SoftTalker 3y ago
  The bank will want insurance at least in the amount of what you owe on the mortgage. They don't really care if it's enough to cover actual losses.
  - Guvante 3y ago
    Coverage amount is not what the article is about. It is about covered things happening.
BoxFour 3y ago
As pointed out in the article, states frequently maintain a taxpayer-backed insurers of last resort (and apparently notably prevalent in Florida). Nevertheless, as the article also highlights, this approach is unlikely to have favorable long-term financial implications for the state.
- dehrmann 3y ago
  At least it might finally force states to make hard choices.
- no_wizard 3y ago
  I fear the end result of this is going to be federal bailouts of state insurance programs, which means that money will get politicized and used to further someones agenda as a means to passing. I often wonder how far away we are from funding being withheld from states with bad public policy as perceived by the party in power. It sets dangerous precedents of coupling human suffering to policy maneuvers (which I realize, happens even today, but in broader strokes NY gets hurricane assistance same as Florida. Imagine a scenario where Florida's general public is punished because of laws on their books, or New York public is punished because of policies it has etc.)
  - LapsangGuzzler 3y ago
    > I often wonder how far away we are from funding being withheld from states with bad public policy as perceived by the party in power. It sets dangerous precedents of coupling human suffering to policy maneuvers This has been going on for many years. From GOP states refusing to accept expanded Obamacare grants, thereby restricting access to healthcare for the poor to refusing to extend 9/11 first responder healthcare until people like Jon Stewart got involved, oppression and cruelty has been used as leverage in policymaking going back to the founding of the US.
  - civilitty 3y ago
    > I fear the end result of this is going to be federal bailouts of state insurance programs, which means that money will get politicized and used to further someones agenda as a means to passing. Welcome to the future: https://en.wikipedia.org/wiki/National_Flood_Insurance_Program https://en.wikipedia.org/wiki/National_Flood_Insurance_Progr... Congress has been bailing out the program for almost 20 years now.
Waterluvian 3y ago
Ideally the system isn’t propped up by tax dollars. Previously lucrative regions becoming financially uninhabitable is probably the one thing nobody can ignore. It’s what I like about the insurance industry: it cares not for opinions and moods and politics because it is betting with cash. No amount of climate denial changes the math on a bad deal.

911e 3y ago

This is quite interesting, I feel like at some point we need to cut those middleman that bail out as soon as paying is involved

SoftTalker 3y ago
They aren't in business to give away money. Insurance is all about paying to mitigate risk. If the risk of loss increases or becomes too hard to predict, insurance will get more expensive or simply not be offered.
- alwaysbeconsing 3y ago
  There's no inherent reason it must be a profit-making business. Organizeing as a cooperative, mutual insurance is also an option. Granted that any version still must set rates that cover expected payouts.
  - itiro 3y ago
    You’re describing government. People cooperate through government to insure stability. I will never understand the endless linguistic indirection when in the end it’s all Soylent Green; just people.
    - pauldenton 3y ago
      [flagged]
    - fluoridation 3y ago
      Are you saying that whenever people cooperate voluntarily, it's a government?
  - JumpCrisscross 3y ago
    > no inherent reason it must be a profit-making business Insurance is an extremely demanding business. This isn’t something you can throw commodity drones at. If you’re willing to create a coöperative job that pays millions to its actuaries and risk managers, fine. Most don’t. Hence why a profit-based model works: it can incentivise the people that are needed for it to work in the long run to do the job. (In the short run, anyone can run a sloppy insurance operation.)
    - bonestamp2 3y ago
      One interesting experiment in this area is the Canadian Province of Saskatchewan, where the government has run a break even auto and property insurance organization since 1945. It does not receive money from the tax payers and is completely self sustaining: https://en.wikipedia.org/wiki/Saskatchewan_Government_Insurance https://en.wikipedia.org/wiki/Saskatchewan_Government_Insura...
      - bonestamp2 3y ago
        Aside from being non-profit, an additional benefit that makes this model more cost effective is that you don't have insurance companies suing each other because everyone has the same insurance company.
  - tpmoney 3y ago
    Mutual insurance companies exist, presumably they are also bailing in places where the cost is unsustainable.

Guvante 3y ago

I know when I bought I had to have a quote for appropriate insurance policy in order to close. I never asked what appropriate was however.

SoftTalker 3y ago
The bank will want insurance at least in the amount of what you owe on the mortgage. They don't really care if it's enough to cover actual losses.
- Guvante 3y ago
  Coverage amount is not what the article is about. It is about covered things happening.

BoxFour 3y ago

As pointed out in the article, states frequently maintain a taxpayer-backed insurers of last resort (and apparently notably prevalent in Florida). Nevertheless, as the article also highlights, this approach is unlikely to have favorable long-term financial implications for the state.

dehrmann 3y ago
At least it might finally force states to make hard choices.
no_wizard 3y ago
I fear the end result of this is going to be federal bailouts of state insurance programs, which means that money will get politicized and used to further someones agenda as a means to passing. I often wonder how far away we are from funding being withheld from states with bad public policy as perceived by the party in power. It sets dangerous precedents of coupling human suffering to policy maneuvers (which I realize, happens even today, but in broader strokes NY gets hurricane assistance same as Florida. Imagine a scenario where Florida's general public is punished because of laws on their books, or New York public is punished because of policies it has etc.)
- LapsangGuzzler 3y ago
  > I often wonder how far away we are from funding being withheld from states with bad public policy as perceived by the party in power. It sets dangerous precedents of coupling human suffering to policy maneuvers This has been going on for many years. From GOP states refusing to accept expanded Obamacare grants, thereby restricting access to healthcare for the poor to refusing to extend 9/11 first responder healthcare until people like Jon Stewart got involved, oppression and cruelty has been used as leverage in policymaking going back to the founding of the US.
- civilitty 3y ago
  > I fear the end result of this is going to be federal bailouts of state insurance programs, which means that money will get politicized and used to further someones agenda as a means to passing. Welcome to the future: https://en.wikipedia.org/wiki/National_Flood_Insurance_Program https://en.wikipedia.org/wiki/National_Flood_Insurance_Progr... Congress has been bailing out the program for almost 20 years now.

Waterluvian 3y ago

Ideally the system isn’t propped up by tax dollars. Previously lucrative regions becoming financially uninhabitable is probably the one thing nobody can ignore. It’s what I like about the insurance industry: it cares not for opinions and moods and politics because it is betting with cash. No amount of climate denial changes the math on a bad deal.