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As a homeowner in Southern California, this type of policy (not necessarily driven by climate) directly negatively affects me due to the risk of fires and earth

As a homeowner in Southern California, this type of policy (not necessarily driven by climate) directly negatively affects me due to the risk of fires and earthquakes. However, I don’t think there’s a great solution. The basic problem is that natural disasters represent a correlated risk. Insurance pools only seem to make sense for uncorrelated risks such as house fires or pipe bursts or whatever, where the high individual cost of many relatively independent unlikely events can be smoothed out into a low guaranteed cost. Perhaps a sufficiently large insurer could dilute the risk of an earthquake destroying a large percentage of homes in Los Angeles by also covering large swaths of other high-risk parts of the country or world.

lotsofpulp 3y ago
> Perhaps a sufficiently large insurer could dilute the risk of an earthquake destroying a large percentage of homes in Los Angeles by also covering large swaths of other high-risk parts of the country or world. At a certain point, this is just all taxpayers as a whole.
- bonestamp2 3y ago
  Exactly, and we frequently see Federal Aid in lots of big disasters. Eventually, the government will be the only insurance organization that covers the catastrophic events where we really need insurance the most, and then we can stop pretending that private for-profit insurance is something that our society wants. The government is already the "insurance" for so many different types of things that we should just lean into it 100%.
digitalsushi 3y ago
As anti-human as this makes me sound, this does make me personally understand why eyes and teeth are not covered on my health insurance. I can't take a claim out on my car's tires getting used up over 100,000 miles, either.
- gruez 3y ago
  >As anti-human as this makes me sound, this does make me personally understand why eyes and teeth are not covered on my health insurance. This doesn't make any sense. You can rack up way more expensive charges/procedures on the rest of your body (eg. triple bypass or hip replacement) than your eye or teeth ever could.
jowea 3y ago
> Perhaps a sufficiently large insurer could dilute the risk of an earthquake destroying a large percentage of homes in Los Angeles by also covering large swaths of other high-risk parts of the country or world. Yes, I believe that's one the reasons reinsurance exists.
jdlshore 3y ago
> Perhaps a sufficiently large insurer could dilute the risk of an earthquake destroying a large percentage of homes in Los Angeles by also covering large swaths of other high-risk parts of the country or world. This exists and is called "reinsurance."
- kevinventullo 3y ago
  Okay, then I suppose no one wants to reinsure the California Earthquake Authority as their condo unit policy only covers up to $100k and everyone else seems to flat out refuse earthquake coverage for a large building.

lotsofpulp 3y ago

> Perhaps a sufficiently large insurer could dilute the risk of an earthquake destroying a large percentage of homes in Los Angeles by also covering large swaths of other high-risk parts of the country or world. At a certain point, this is just all taxpayers as a whole.

bonestamp2 3y ago
Exactly, and we frequently see Federal Aid in lots of big disasters. Eventually, the government will be the only insurance organization that covers the catastrophic events where we really need insurance the most, and then we can stop pretending that private for-profit insurance is something that our society wants. The government is already the "insurance" for so many different types of things that we should just lean into it 100%.

digitalsushi 3y ago

As anti-human as this makes me sound, this does make me personally understand why eyes and teeth are not covered on my health insurance. I can't take a claim out on my car's tires getting used up over 100,000 miles, either.

gruez 3y ago
>As anti-human as this makes me sound, this does make me personally understand why eyes and teeth are not covered on my health insurance. This doesn't make any sense. You can rack up way more expensive charges/procedures on the rest of your body (eg. triple bypass or hip replacement) than your eye or teeth ever could.

jowea 3y ago

> Perhaps a sufficiently large insurer could dilute the risk of an earthquake destroying a large percentage of homes in Los Angeles by also covering large swaths of other high-risk parts of the country or world. Yes, I believe that's one the reasons reinsurance exists.

jdlshore 3y ago

kevinventullo 3y ago
Okay, then I suppose no one wants to reinsure the California Earthquake Authority as their condo unit policy only covers up to $100k and everyone else seems to flat out refuse earthquake coverage for a large building.