> You can profitably insure against a flood because it is not more likely to rain when everybody has flood insurance--the risk is independent. Flood insurance

> You can profitably insure against a flood because it is not more likely to rain when everybody has flood insurance--the risk is independent. Flood insurance is a weird corner case of the market. Insurers would rather not provide flood insurance because of the widespread impact of flooding caused by weather; the claims are enormous. They'd prefer to exclude weather-associated flooding and limit it only to flooding caused by, say, broken plumbing. To the extent you can purchase flood insurance in flood-prone areas, it's because the government has intervened in the market and requires insurers to provide it as a condition of doing business in the state or to get a federally-backed mortgage loan. For the same reason, earthquake damage is explicitly excluded from homeowner's insurance in quake-prone states like California, Washington, and Hawaii. You have to purchase separate, and very expensive, earthquake insurance. When people see the premiums, they usually decide to forego it. Some sources: https://www.bbc.com/future/article/20240311-why-climate-change-is-making-the-us-uninsurable https://www.bbc.com/future/article/20240311-why-climate-chan... https://www.nar.realtor/flood-insurance/faq-national-flood-insurance-program-expires-september-30-2024 https://www.nar.realtor/flood-insurance/faq-national-flood-i... https://www.insurance.ca.gov/01-consumers/105-type/95-guides/03-res/eq-ins.cfm https://www.insurance.ca.gov/01-consumers/105-type/95-guides...