13 ms·

This sounds more like a wildfire management crisis than an insurance crisis.

by Zanni 3y ago

lukasb 3y ago
It’s potentially a state fiscal crisis if the state keeps operating as insurer of last resort.
- koolba 3y ago
  s/potentially/eventually/ From the article: > But the enrollment surge is putting a financial strain on the state insurer as it faces a potential loss of $311 billion, up from $50 billion in 2018. For reference, the entire budget for the state of CA is $224 billion.
  - euroderf 3y ago
    de Toqueville: "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."
toomuchtodo 3y ago
Lots of sad folks due to risk price catching up to risk reality. California, Texas, and Florida all hit hard, and inconveniently, most populous US states. Move where the risk is lower, with my apologies to Sam Kinison. https://www.wired.com/story/insurance-rates-soaring-us-homeowners-climate-danger-zones-florida-louisiana-california-hurricane-flood/ https://www.wired.com/story/insurance-rates-soaring-us-homeo... https://www.nytimes.com/2024/02/29/climate/smokehouse-creek-fire-insurance-climate.html https://www.nytimes.com/2024/02/29/climate/smokehouse-creek-... https://riskfactor.com/ https://riskfactor.com/ https://resilience.climate.gov/ https://resilience.climate.gov/
- bushbaba 3y ago
  The risk IS lower in many parts of California. It's a government policy issue more than anything else.
  - toomuchtodo 3y ago
    If this is the case, the state of California should have no problem remaining the insurer of last resort (from a fiscal solvency perspective). From a comment koolba provided with liability numbers, this appears to not be the case (potential losses exceeding California’s entire budget). This leads me to believe that California residents have taken on risk beyond what they and the state can afford. Not great if the world’s fifth largest economy is experiencing this financial stress. https://news.ycombinator.com/item?id=39804679 https://news.ycombinator.com/item?id=39804679
    - kortilla 3y ago
      Yeah, people shouldn’t live in tinder boxes, swamps, or on the top of mud piles that slide when it rains. I absolutely hate society picking up the tab for people doing such reckless things with their own homes.
      - toomuchtodo 3y ago
        If there are places with lower risk, certainly, extend insurance there (when reasonable) using data driven risk models. But places where the risk is high? Prohibit building by refusing to issue a building permit, and perhaps cover existing owners in some fashion. If their house burns down, they must turn over the land to be locked up and never built on again to receive their claim payout. Similar to what FEMA does for flooding. You want to strongly discourage moral hazard (repeatedly funding rebuilds with taxpayer dollars in high risk areas) while not making housing insecurity drastically worse than it already is. I admit this is a tall order with the perpetual housing shortage. https://www.fema.gov/press-release/20230502/fact-sheet-acquisition-property-after-flood-event https://www.fema.gov/press-release/20230502/fact-sheet-acqui... > Acquisition of Property After a Flood Event > If the homeowner still owes a mortgage on the home, the balance due will be deducted and paid to the lienholder. After required payment(s) have been made, the structure is then demolished and the land is deeded to the local government with its use restricted to open space. The land must remain open in perpetuity.
        3y ago

This sounds more like a wildfire management crisis than an insurance crisis.

by Zanni 3y ago

This sounds more like a wildfire management crisis than an insurance crisis.

lukasb 3y ago

It’s potentially a state fiscal crisis if the state keeps operating as insurer of last resort.

koolba 3y ago
s/potentially/eventually/ From the article: > But the enrollment surge is putting a financial strain on the state insurer as it faces a potential loss of $311 billion, up from $50 billion in 2018. For reference, the entire budget for the state of CA is $224 billion.
- euroderf 3y ago
  de Toqueville: "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."

toomuchtodo 3y ago

Lots of sad folks due to risk price catching up to risk reality. California, Texas, and Florida all hit hard, and inconveniently, most populous US states. Move where the risk is lower, with my apologies to Sam Kinison. https://www.wired.com/story/insurance-rates-soaring-us-homeowners-climate-danger-zones-florida-louisiana-california-hurricane-flood/ https://www.wired.com/story/insurance-rates-soaring-us-homeo... https://www.nytimes.com/2024/02/29/climate/smokehouse-creek-fire-insurance-climate.html https://www.nytimes.com/2024/02/29/climate/smokehouse-creek-... https://riskfactor.com/ https://riskfactor.com/ https://resilience.climate.gov/ https://resilience.climate.gov/

bushbaba 3y ago
The risk IS lower in many parts of California. It's a government policy issue more than anything else.
- toomuchtodo 3y ago
  If this is the case, the state of California should have no problem remaining the insurer of last resort (from a fiscal solvency perspective). From a comment koolba provided with liability numbers, this appears to not be the case (potential losses exceeding California’s entire budget). This leads me to believe that California residents have taken on risk beyond what they and the state can afford. Not great if the world’s fifth largest economy is experiencing this financial stress. https://news.ycombinator.com/item?id=39804679 https://news.ycombinator.com/item?id=39804679
  - kortilla 3y ago
    Yeah, people shouldn’t live in tinder boxes, swamps, or on the top of mud piles that slide when it rains. I absolutely hate society picking up the tab for people doing such reckless things with their own homes.
    - toomuchtodo 3y ago
      If there are places with lower risk, certainly, extend insurance there (when reasonable) using data driven risk models. But places where the risk is high? Prohibit building by refusing to issue a building permit, and perhaps cover existing owners in some fashion. If their house burns down, they must turn over the land to be locked up and never built on again to receive their claim payout. Similar to what FEMA does for flooding. You want to strongly discourage moral hazard (repeatedly funding rebuilds with taxpayer dollars in high risk areas) while not making housing insecurity drastically worse than it already is. I admit this is a tall order with the perpetual housing shortage. https://www.fema.gov/press-release/20230502/fact-sheet-acquisition-property-after-flood-event https://www.fema.gov/press-release/20230502/fact-sheet-acqui... > Acquisition of Property After a Flood Event > If the homeowner still owes a mortgage on the home, the balance due will be deducted and paid to the lienholder. After required payment(s) have been made, the structure is then demolished and the land is deeded to the local government with its use restricted to open space. The land must remain open in perpetuity.
      - 3y ago