36 ms·

Is the world becoming uninsurable?

• datavirtue 2y ago
  Part of this is that homes are too fancy and large. All of that translates into elevated costs and risks.
  • osigurdson 2y ago
    If people like them, they are not too big or too fancy.
    • SideQuark 2y ago
      It is if they cannot afford them. Most people would love far more than they can afford, but reality wins.
      • osigurdson 2y ago
        The problem with "people should aim lower" type arguments is eventually everyone is living in a tent.
        • SideQuark 2y ago
          The problem with slippery slope fallacies is, well, they are a fallacy. I also see you coupled it with the strawman fallacy, since I didn't claim anything as wide ranging as "people should aim lower." Pretty impressive to pack so much poor reasoning into one sentence. Spending within what one can afford is a long running method of resource allocation which has served mankind for millennia, and mankind is now living at a higher standard of living than any point in history.
          • osigurdson 2y ago
            >> Part of this is that homes are too fancy and large. All of that translates into elevated costs and risks. I was originally responding to the above parent comment. Agree, if you can't afford it, don't buy it.
  • JKCalhoun 2y ago
    Also, they are not building small homes anyway. Developers here in the Midwaste aren't going to put a cheap house on a lot if they can instead put a 3500 sq. ft. home and get triple the profit.
    • Sabinus 2y ago
      And if the developers can't sell that house because it's uninsurable, then they will stop.
• _3u10 2y ago
  No it isn’t. It’s just unprofitable which means it can be fixed with higher rates.
  • bigstrat2003 2y ago
    Sure, but state governments (in the US) also set what prices are allowed (disclaimer: I don't work in the industry but have friends that do so I might misunderstand). And that means that if the state says "you can only charge X for insurance", and it's still unprofitable, those customers are effectively uninsurable.
    • _3u10 2y ago
      I see that as a regulatory issue, but of course, the end result is the same. I'm familiar with services being effectively unavailable as a result of regulation from living in Canada. (Health insurance / not being allowed to buy healthcare).
  • s1artibartfast 2y ago
    There are to components, breakeven price for profitability and the price that an or will be paid. If it costs 10 million dollars to replace a house, the insurance will be out reach for most homeowners.
    • _3u10 2y ago
      My understanding is that some people are willing to pay, but it's illegal to charge that much.
      • s1artibartfast 2y ago
        There is an issue with price caps in some regions. Some of those have been addressed. I think this is a subset of larger shift in the economics of insurance. While coverage focuses most on the climate change aspect, the majority of the change is driven by building costs. If you cant rebuild economically, then you cant insure economically.
• w1 2y ago
  No https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...
• delichon 2y ago
  > Like virtually all problems, it's been approached as a problem with a political solution: the state or federal government can force insurers to continue offering policies that put them on the hook for additional catastrophic losses, and / or become "insurers of last resort." When you put a minimum on the price of wages the true minimum is zero. When you put a maximum on the price of insurance the true maximum is 1/0.
• bluedevil2k 2y ago
  Like we see in California, when the government sets a price ceiling, insurance companies just leave. Same in Florida. If the free market truly was allowed run normally, the insurance rates in Pacific Palisades or on the Florida coast would be so high that no one could afford to live there. Is that a bad thing? If someone was living in a house near where they tested missiles, we'd call them crazy. At what point can we say the same about people building and rebuilding over and over in these disaster areas.
  • tptacek 2y ago
    Or some forms of housing in high-risk areas, like sprawling single-family houses, might get too expensive, and the only way for people to live in those places would be a smaller number of denser, more easily defended structures. Also a good thing.
  • underwater 2y ago
    Price caps always seem like such a transparent political move.
    • mgiampapa 2y ago
      How about profit caps? I feel like government stepping in and being the insurer with a sufficiently large pool of risk to spread around lets them set a fair rate without the need to make a return or answer to shareholders. To some extent this has helped with health insurance. Each year I get a check back from my insurer saying they didn't spend enough on my care vs my premiums.
      • ladberg 2y ago
        Insurance companies have pretty thing profit margins regardless, even in areas where profits are not capped. It's a competitive marketplace!
        • tomrod 2y ago
          I'm not sure I believe your factoid. Can you cite? UHC is one of the wealthiest companies in the world.
• Mathnerd314 2y ago
  So let me try to put the author's argument in order: (1) The author tried to get homeowner's insurance, but was denied because their home was a significant hurricane risk (2) The author (maybe?) got insurance through a state-run FAIR program, but then cites news reports that these programs are close to insolvency (As are a significant amount of non-state-run homeowner insurance programs). (3) The author is like, "well, if it's so hard to insure my house, maybe I should think about living somewhere else." And then generalizes to "a lot of places should be uninsurable and uninhabited - apocalypse here we come"
  • _dabs 2y ago
    Makes sense to me. Good comprehension
• api_or_ipa 2y ago
  Every era has it's Malthusian alarmists and without fail, each has been proven wrong by exactly the same thing the author decries and says won't work this time: technological change and adaption. There's no reason to think this time will be any different. Will some places become uninsurable? Sure, plenty of places over time have become uninsurable. Will the whole world became uninsurable? Absolutely not, because we are quite good at adaptation in the face of adversity. The issue in California is not the price of insurance, it's availability because of extremely myopic ballot initiatives that are entirely political in nature. Should insurance be fairly priced, then the market can force people out of uninsurable areas and into areas with far less chance to burn.
  • colechristensen 2y ago
    You can't live in places where your home is going to get destroyed every couple of decades by wildfires, floods, or hurricanes. There are more of these places now because of climate change and a lot of people are going to have to migrate over the next century, like huge global migrations. Insurance can't/won't allow a bunch of people to deny this reality any more (or at least much longer). LA is going to be pretty uninsurable unless the local governments do a lot to mitigate the fire risk.
    • tptacek 2y ago
      You can; it's just expensive.
      • TheOtherHobbes 2y ago
        So is living on the sea bed. It's irrationally expensive and inconvenient, which is why we don't do it. Living in areas in constant danger of flooding and/or burning and/or storm wind damage and/or drought seems like quite an eccentrically inconvenient lifestyle flex. Unless you like disaster movies.
        • achierius 2y ago
          Where are you suggesting we live then? Most all of the US is at "constant" risk for at least one kind of disaster in your list or another.
• amazingamazing 2y ago
  my sadly hot (no pun intended) take is that insurance needs to be let free. price controls on insurance are doubly counterproductive - not only does it result in the companies leaving, it results in those who need the insurance losing their stuff when catastrophe inevitably hits. it’s ok if insurance is expensive - let it result in the insured goods or services having a serious price adjustment. rather than price controls a slightly better solution would be just to nationalize insurance and force everyone to use it, but even that is not really a solution since highly correlated events are the antithesis of insurance.
  • tptacek 2y ago
    I think this is a pretty common and au courant take right now.
  • wat10000 2y ago
    Agreed. The government should ensure fair prices by ensuring healthy competition. Maybe have a (non-subsidized) public option. The government should also compensate for the power disparity by requiring policies to have reasonable coverage and making sure insurance companies actually honor them when the times comes. But directly dictating a maximum price isn’t going to go well.
  • _huayra_ 2y ago
    Totally agree, though there should still be insurance commisions and controls to ensure that any company selling policies in a given area is solvent enough to pay out. Otherwise you'll have fly-by-night insurance companies selling sham policies for cheap then folding up shop during the next natural disaster saying "oopsies guess it's the state's responsibility now".
  • TheOtherHobbes 2y ago
    This is not an insurance problem, or a market problem, or an MBA econ problem. It's a "Do we want cultural extinction or a relatively comfortable and habitable planet?" problem, which is not quite the same thing. No amount of faith-based "We will adapt!" is going to make an impression until evidence appears that we are actually adapting in real, tangible ways. Clearly, objectively, and empirically we are not. We are doing the opposite - pretending to ourselves the problem is going to be solved by continuing with the same mistakes which caused it.
• naming_the_user 2y ago
  To me this sort of thing just seems like a weird financialization brain disease of sorts. At the end of the day if your house burns down you can go and get some wood / stone / whatever and build one somewhere else and this will basically always be possible to do to some degree. The question is just about what the chance of having to do that per year is and what that represents in dollar value. It can’t not be possible.
• greenthrow 2y ago
  An hour in and nobody in these comments is addressing climate change? The risks of drought and the resulting fire or hurricanes and floods is much higher than it has been in recorded history in these areas because of climate change. Should people be forced to abandon their homes because the fossil fuel companies lied and misled the public and bought out our governments for the last 50 years? IMHO we should be seizing the fossil fuel companies' assets and using them for disaster relief around the world due to the catastrophe they have deliberately caused. The talk about insurance rates is a deliberate distraction.
  • x0x0 2y ago
    > The risks of drought and the resulting fire or hurricanes and floods is much higher than it has been in recorded history in these areas because of climate change I saw an article on npr [1] which basically agrees with the chart on the blogpost. I 1980, there were 3 disasters a year that cost $1B, inflation adjusted. In 2024, 24. The second chart in the npr article is pretty terrifying. [1] https://www.npr.org/2024/10/08/nx-s1-5143320/hurricanes-climate-change https://www.npr.org/2024/10/08/nx-s1-5143320/hurricanes-clim...
    • AlexandrB 2y ago
      Without accounting for population growth in high risk areas this is meaningless. If the population and housing units in a floodplain doubles, a $500M 1980s disaster becomes a $1B 2024 disaster. That's not to mention the above-inflation increase in the cost of housing which probably bumps these numbers up as well.
      • greenthrow 2y ago
        That is a red herring. The frequency and intensity of the wildfires has increased. Stop repeating fossil fuel talking points meant to distract from climate change.
  • ggm 2y ago
    Don't agree. Well partially. I also think the privatise the profits socialise the losses story is strong, and the coal and oil interests should pony up more remediation costs. But insurance is one of the best signals we have to true risk/consequence/likelihood, which commercial interests pay attention to The best long term outcome here would be rebuilding safer but the downside will be "which excludes the poor" -that's where I think state and federal policy should apply the lever: require socialised housing outcomes. Price controls on insurance forces socialised losses. Better is some middle ground: mandate insurance, demand adequate mitigations and defences. But losing the price signal is bad.
• atleastoptimal 2y ago
  Every year, humanity grows richer, more resilient to natural disasters, and more capable of predicting natural disasters and their negative outcomes. The point of insurance is to spread the expected burden of calamities that will affect a minority of a population to the entire population, so that those affected will have a financial safety net. This principle works regardless of how disastrous or prone to calamity a population is. If there will be more fires, more hurricanes, etc, the market will favor homes built in different locations, different architectural styles, etc in response to changing premiums and probabilities of disaster. We don't live in a world like in 1905 where an earthquake would lead to a fire that burns down an entire city. Prosperity simply requires changing to circumstances where valid.
  • layman51 2y ago
    I agree with your analysis of how insurance works. But, wouldn’t the burden of calamities only spread amongst the insurance holders? I am not sure what the factors are, but if a lot more people go without insurance (because they are independently wealthy or live in an uninsurable location), doesn’t change the calculation?
    • atleastoptimal 2y ago
      People who go without insurance because they live in an uninsurable location would leave those who remain insured better off, because the insurance company would be less likely to need to make an exorbitant payout to the victims in the disaster-prone area. This is of course true as long as insurers don't manipulate the market to keep premiums high despite their total expected claim outlay lowering. As an insurance buyer, in a hypothetically ideal market situation, you would want all those who also purchase from the same insurer to have the lowest risk of needing an expensive claim paid. The lower the expected payout * risk of disaster means lower premiums for the insurer to still make an expected profit. I think what will happen is simply: Houses are built in places which are more insurable, existing danger-prone houses will exist until they are destroyed, until then they will increasingly be status objects for the elite who can afford the loss and have inaccurate risk appraisal. The fact that so many valuable objects are kept in Malibu/Palisades homes despite fires happening there a lot (as recent as 2018) indicates homeowners in disaster-prone areas aren't acting perfectly rationally.
• jmyeet 2y ago
  The California (and Florida) situation is easily explainable [1]. As this video points out you have these forces in play: 1. The state who sets insurance price caps for political expediency, basically to increase house prices (because they'd go down if insurance prices could float freely). BTW we have examples of areas that are uninsurable like the Florida Keys; 2. The homeowners who want their house prices to go up and want to pay as little as possible for home insurance; and 3. Insurance companies who can't write too many policies so they remain solvent. Price caps ultimately lead to insurers leaving the market. LA in particular has competing problems: wildfires and earthquakes. If you want to avoid total loss due to wildfires, first you wouldn't build in Pacific Palisades at all. It's a vegetation rich area between hills with potentially high winds. If you want to avoid fire loss, you would build out of concrete not timber-framed buildings. But the problem is that earthquakes have the opposite building priorities. Lumber is actually quite good in earthquake zones because you tend to get less loss of life from the collapse of timber houses. Now you can build concrete houses that are earthquake-resistant (eg in Japan) but it's expensive. Ultimately all of this comes down to a malaise brought on by high house prices. Voters consistently vote for policies that increase their house prices with absolutely no concern for the externalities. If it now costs $1 million to build an "average" house, then you're going to be spending $20,000+ a year on insurance. If your house only cost $100,000, you wouldn't have that problem. It's even worse in California because a lot of property taxes are capped so the state government can't even recoupe taxes from a lot of high-priced property but they suffer the costs of it (eg by being the insurer of last resort). [1]: https://www.tiktok.com/t/ZT2Jek6a6/ https://www.tiktok.com/t/ZT2Jek6a6/
  • amazingamazing 2y ago
    a lot of this here is really what the problem is. for whatever reason, california wants to try to micromanage this particular microeconomy (insurance), but it will fail.
  • nullc 2y ago
    > Now you can build concrete houses that are earthquake-resistant (eg in Japan) but it's expensive. It's expensive here, but is it expensive in Japan? Here its' expensive because it requires extensive steelwork which takes you entirely out of the domain of rubberstamp building approval and into needing PE-stamped bespoke engineering and also gets overbuilt to a greater degree.
• onewheeltom 2y ago
  Yes
• paleotrope 2y ago
  It seems like "severe storms" have increased quite a bit, the other categories not so much. What does "severe storm" mean here? Doesn't seem to mean hurricanes or winter storms. So what gives? Is this just political patronage handed out under the cover of claiming a big storm knocked some trees down?
  • paleotrope 2y ago
    Ok so the source, https://www.ncei.noaa.gov/access/billions/time-series/US https://www.ncei.noaa.gov/access/billions/time-series/US says, "tornado outbreaks, high wind, hailstorms" So most of this cost is roof damage. Which is an area rife with insurance fraud and getting worse.
    • JKCalhoun 2y ago
      Roof damage fraud ... my understanding is the insured has roof damage, takes a payment from the insurance company but does not repair roof, next storm comes along: roof damage again! Easy enough I think to solve.
    • trollbridge 2y ago
      The main problem is (a) the cost of roofers has gone up significantly, (b) as a country we switched from more durable forms of roofing like slate to cheap forms that are harder to repair and easier to damage, like asphalt shingles, and (c) the roofing industry is now full of bad actors committing near-insurance fraud.
• franciscop 2y ago
  I'm not sure I follow this: "why are we subsidizing people to rebuild in places that are clearly no longer habitable" Does/Why would the insurance assume the subsidy is for people rebuilding in the same place? Money is fungible and so it doesn't need to be in the same place, at all. What I'd expect is that insurance for those hard-to-insure places would skyrocket and thus a new balance would be achieved.
  • floatrock 2y ago
    You would expect that in a rational market. But go down a reading hole about flood insurance. tl;dr: in many places in the US, the only company that offers flood insurance is the US government because everyone else has pulled out. And people do tend to use the money to rebuild in the same location -- reasons as varied as "I like my beachhouse" to "my entire community was born and lived in this parish and I aint leaving". Now that the physics of insolvency are starting to overcome political pressure of keeping Daddy Bailout-Bucks around, and people are whispering "managed retreat" without actually being able to say it outloud around polite company, we are starting to see programs like "we'll make you whole in case of a flood, but you aren't allowed to rebuild on the lot if you take our payout". But those buyouts are often met with yells of "government is taking my property!" because again, no one wants to face the stark reality of managed retreat.
    • Sabinus 2y ago
      >people are whispering "managed retreat" without actually being able to say it outloud around polite company, we are starting to see programs like "we'll make you whole in case of a flood, but you aren't allowed to rebuild on the lot if you take our payout". But those buyouts are often met with yells of "government is taking my property!" because again, no one wants to face the stark reality of managed retreat. I know politics is famous for elites abusing it for their own benefit, but sometimes the population is truly not ready for something that the elites understand is utterly necessary and that's not a bad thing. The risks and benefits of an elite class, I guess.
      • trollbridge 2y ago
• whatever1 2y ago
  No it’s just that the insurance companies want mandated insurance pools for which they just receive checks. In health insurance they don’t cover the elderly, and until Obama they did not cover people with prior conditions. For home insurance they don’t cover flood get your are mandated to carry one if you have a mortgage. In life insurance they do not cover you if you have a disease. It’s more like a lottery rather than insurance.
  • fuzzfactor 2y ago
    Some people have always been uninsurable. When you become uninsurable yourself, all you're doing is crossing an imaginary line that has always been there, and kept in imaginary condition precisely to insure that your mental health is stable enough to keep on paying more than anything else :\ You're not supposed to notice this. Whether or not you crossed that line due to any fault of your own, or from the line moving past you with a whimper or a whoosh, you're also not supposed to be able to tell the difference until it's too late. Working with the big ships that are often covered by some of the most well-established insurers in the world, it turns out that when you really need them to pay a claim, the stronger your insurance company, the more likely their lawyers will outmaneuver yours, and the claim will not be paid. Otherwise it could be paying the claim but denying further coverage which the limited number of alternative underwriters can also deny. That's a hell of a negotiating position.
    • whatever1 2y ago
      If ship owners with hundreds of millions in assets cannot fight them, who can?
• zeroCalories 2y ago
  This seems like such a gloomy article. There are plenty of other solutions. If you can't insure a home, that home's price should come down. If there is a 5% chance my home is destroyed every year I would expect a steep discount. I could see myself gambling on such a home for 50% off. Alternatively if you don't wanna gamble, just move to a place that's less risky. If moving is too much for you, renting may still be an option. Yes the increased risk will push prices higher, but it will also crash property prices, so who knows what will happen. Yes land owners in these areas will be screwed, but you don't have a right to returns on your investment.
• plant-ian 2y ago
  Article seems a bit black and white. After fire insurance dumped my mother's insurance, the "Fair" Plan started out with some similar black and white with insights like "zipcode bad for fire" == "you get worst price". Recently their direction has gotten better, better clearance == better pricing, better building == better pricing, etc. This seems like a better direction. Monthly inspections maybe even == better pricing. Repairs == better pricing. Community changes == better pricing. I think there is a lot of gradual room for improvement here. Ie. More spacing between homes, yard clearance, hydrant locations, accessible fire water sources, quarterly inspections by qualified inspectors, etc. Maybe highly exposed communities would have 10,000 gallon water tanks every square block just for fire. I think it is easy for people to "dump" on some of these higher priced real estate incidents seen recently but this is also affecting people on social security. What are we going to do just let their house burn down and then just have a bunch of homeless senior citizens in the mix. Why even have government? Seems like a terrible country to live in if a 30 year old needs to plan their house situation out into their 80s. Also seems a bit ironic to me that you get insurance to cover unexpected future expenses but when insurance takes losses then they can just drop you because .. the losses were unexpected. They've known for 20++ years and I'm sure some... money was made... Did they put some away for this situation? Also if you personally experience a loss they also drop you almost immediately. This idea that we'd just let insurance companies do whatever is *nuts*. Has that ever worked? Honestly pure capitalism seems like the real behind the scenes American dream or fantasy. This same climate change most likely was created by companies making buckets of money with no plan to deal with the side-effects we experience now. Just let the market take care of it.... These companies aren't about making "some profit" they want to make as much profit as possible. Is some 75 year widow living in her and her dead husband's house in Eureka, CA going to convince them to keep insuring her house at a reasonable price? Even if she paid the same insurance company for 30 years? I think the solution is going to require some government intervention because insurance companies just don't care and it will be hard for new players to innovate quickly enough to tackle such a large crisis. Ie. legislating the inspections, legislating the fire-resistant building guidelines + insurance scale, subsidizing certain low income locations, working with communities to improve fire safety and resources. Some work has happened but clearly it is not happening fast enough.
  • deleted 2y ago
• motohagiography 2y ago
  a practical problem is that the financial instruments insurance companies create (insurance linked securities or ILS, catastrophe bonds, and other structured products) are not available to retail investors, who would likely buy a lot of higher risk investments if they were allowed to, and this would provide a lot more collateral for writing new policies. if you want more of it, deregulate it. it's that simple.
• incrudible 2y ago
  “Losses rise with inflation, of course, but the losses are rising far above background inflation.” Losses are very much in line with asset price inflation. If a house rises in value for no good reason other than loose monetary policy, so does the compensation. At the same time, insurers struggle to find safe yields to match these cost increases when that same monetary policy keeps interest rates low. Looking at the chart pictured, one would expect that extreme weather events have increased dramatically after 2000, but that is not the case: https://ourworldindata.org/natural-disasters https://ourworldindata.org/natural-disasters
• purplezooey 2y ago
  It’s hard to view insurance as a viable business when overpaying executives has become the norm. Take State Farm, for instance: its CEO was awarded $50 million in compensation over just two years — 2022 and 2023. The industry is rife with waste and high barriers to entry.
  • itake 2y ago
    Lets pretend the CEO made $0 over 2 years and that $50m goes to what? - $350 annual bonus to the 67,000 employees? - Lower the cost of the 91 million policies by $0.27 per year each? - Cover an additional 50 homes in California? Where should it go?
    • system7rocks 2y ago
      They bank it as any insurance company should do. Invest it cautiously. Hire sound decent people to run it with solid levels of accountability (including from a board of directors that is mostly made up of a rotating number of clients). Do it from the beginning of the company. Grow your staff slowly. Build enough of a cushion that can last the company years. Right? Right? I'd run that company well for $250k/annually + benefits (an enormous amount of money).
      • itake 2y ago
        > They bank it as any insurance company should do. Invest it cautiously. I hope they aren't investing that capital. AFAIK, insurance capital needs to be liquid, for it to be ready for a payout. You still didn't address my point is that $25m/yr is a drop in the ocean. "investing $25m properly" will have zero impact on the business.
        • Snoddas 2y ago
          It will have atleast be > than zero, and doing it every year instead of giving it away to some overpriced CEO will it will accumulate.
• Animats 2y ago
  Not uninsurable, but buildings are going to have to become tougher. It's happened before. Chicago's reaction to the Great Fire was simple - no more building wooden houses. Chicago went all brick. Still is, mostly. The trouble is, brick isn't earthquake resistant. Not without steel reinforcement. I live in a house built of cinder block filled with concrete reinforced with steel. A commercial builder built this as his personal residence in 1950. The walls look like a commercial building. The outside is just painted cinder block. Works fine, survived the 1989 earthquake without damage, low maintenance. It's not what most people want today in the US.
  • Sabinus 2y ago
    If the market is allowed to price insurance correctly then we can motivate building designs to be more disaster resist. If the McMansion can't get insurance but disaster resistant, modest homes do, then people will adapt.
    • iandanforth 2y ago
      "Correctly" is doing a lot of work here. Some readers might miss that this is double edged. Insurance is a mandated product. You don't have a choice if you want a mortgage, or want to run a business. So while it is true that the sustainable price for insurance in many areas is higher than what current regulations allow, let's not forget what happens in an unregulated insurance market; price gouging.
      • chii 2y ago
        > unregulated insurance market; price gouging. with sufficient competition, it is impossible to price gouge. So if there is supposed price gouging, then there must be insufficient competition. Therefore, the source of the lack of competition would need to be removed (ostensibly, by gov't - such as increasing business loans so that new insurance companies can be started).
        • kstenerud 2y ago
• scoofy 2y ago
  When nerds like me were freaking out about climate change in 2003, what did people think we we’re talking about?!? This is the exact scenario every single scientist I studied under openly discussed: probably not an extinction level event, but very, very expensive… Expensive to the point of it being cheaper in the long run to switch to renewables asap and hope for the best. It’s like a 150M conservatives are all at once are saying “Wait a minute! We should do something about this!” Uh… yea, no shit.
• gsf_emergency 2y ago
  Imho insurance is one of the most underrated problems in economic "science". Punks feelin lucky are advised to Google (or ask any GPT about) "insurance paradox". Haha
• luisfmh 2y ago
  My only hope for climate change is that insurance companies start lobbying to have a more predictable environment since risk models works better when things aren't chaotic, and that gives a monetary incentice for companies to do better
• BeetleB 2y ago
  Ouch - so this explains why my home insurance almost tripled in a year - and I don't live in an at-risk area. Everyone I know had huge premium increases.
• zaik 2y ago
  Oh look, climate change does economic damage, but not at the source.
• danielmarkbruce 2y ago
  This is silly, and overcomplicating the issue. The world is very insurable, at a price. The property and casualty business is competitive as hell in almost all parts. The government needs to just stay out of it.
  • csours 2y ago
    Ok, just play the next move. Insurance is expensive. Now what happens.
    • lionkor 2y ago
      People don't build wood houses in an area that gets wild fires
      • jopsen 2y ago
        Probably they will, at one point maybe that banks wills stop financing it. But only when you can't get mortgages, people will begin to stop, and even then some will continue. It'll take a long time for these changes to trickle out. Especially, when real estate prices in LA are so high. It might be faster to fix this with zoning. Or if the area is so desirable, find a way to engineer your way out of it.
        • danielmarkbruce 2y ago
          We don't want fast fixes. Things change, building materials could change, fire fighting methods could improve etc. If we can send the right signal via the right price for the risk, people can react accordingly to either reduce or avoid the problem.
          • jopsen 2y ago
            > people can react accordingly to either reduce or avoid the problem. Yes, but lots of people won't be consider all factors when buying a house. Prices are high, houses aren't on the market long, when you do find a house that matches your criteria, are you going to consider if it's safe from floods, fires, earth quakes, etc? You're already factoring in schools, distance to work, shopping options, etc. Not to mention the fact that you're mostly worried about whether the house has mold, termites, pest, or construction deflects, how long time to the roofing need to be replaced. Asking normal people to factor in natural disaster probabilities is difficult. Maybe, it's better to not allow construction is such places through zoning. I bet most home buyers spend more time looking for pests, mold, leaky pipes, etc, than they do investigating wild fire risks.
• paulsutter 2y ago
  Apparently climate change causes reductions in fire department funding, amirite?
• sophiaisabella8 2y ago
  [dead]
• Throw8394958 2y ago
  So what? Living without insurance is nothing crazy. Many dogs (pitbulls, akitas..) are uninsurable, yet we see them everywhere. People just accept damages, and pay it out of their own pocket (or run away and do not pay).
• ashoeafoot 2y ago
  Fantastic article. So what if one set of matket participants goes full blown denial and tries to force a economically unsound activity upon the state who forces it upon external unwilling participants aka a classic extractive empire going to war for extended reality denial? Economic idealisms or nostalgia with outsourced externalities what a concept..
• lupinglade 2y ago
  The problem is the materials used. Greedy developers building junk homes and making bank. People in those areas are able to afford fire resistant housing but most of them are being swindled into buying stick homes. The few properly designed homes fared far better. Code needs to be updated and consumers need to be educated.
  • Dracophoenix 2y ago
    A number of those homes were old enough to qualify for social security. I doubt it's reasonable to believe developers could anticipate the environmental conditions that would befall a home some half-century since breaking ground.
  • dcchambers 2y ago
    I think the problem is less the materials used, and more that urban sprawl has pushed cities to build out into areas they shouldn't be building. Destroying the wetlands to build houses closer to the ocean has eliminated the natural hurricane protection (from storm surge, at least) that many low lying areas had. Building into fire-prone hills outside of cities in Southern California was never going to end well.
• MagicMoonlight 2y ago
  What are we betting that the Americans rebuild in wood again? It seems like they never learn. We had a single city fire like this 500 years ago and since then we haven’t… because we built the city back in brick instead of wood.
  • ohazi 2y ago
    Earthquakes. Options are wood again, or steel and concrete.
    • TheCapeGreek 2y ago
      Somehow, all these nations around the world with earthquakes still have their houses standing. Why is it always whataboutism with earthquakes when presented with "don't build houses out of matchsticks"?
      • jandrewrogers 2y ago
        Countries like Japan use the same construction techniques as the western US. Few countries have earthquakes as strong as the Pacific Rim, where M8-9+ are regular occurrences. Properly designed wood-framed houses will survive that. I’ve never seen a house in Europe that was engineered to the M8.5 earthquake standard that is mandatory where I live in the US. They used to construct houses like in Europe but they kept getting destroyed in earthquakes and were made illegal for safety reasons.
      • locallost 2y ago
        They do not have their houses standing. Look at the recent earthquake in Turkey and Syria. 60k dead and 150 billion in damage.
  • ezequiel-garzon 2y ago
    Where 500 years ago?
    • lionkor 2y ago
• pinoy420 2y ago
  Betteridges law of headlines. No. Silly article.
• Panzer04 2y ago
  This seems like more of a commentary on a general lack of understanding of basic economics. If things aren't priced correctly, mayhem ensues. Frustratingly the political solutions to high prices often just put off the problem. Government mandated price fixing, of insurance, rentals, etc never fixes the core problem, only allows it to fester. Sometimes it's taxpayers losing money, sometimes it's the few unlucky ones being forced by the government - and arguably the latter is worse for everyone as private investment and services dry up because of regulatory risks.
• manmal 2y ago
  Naive question, but why not raise taxes in hazardous areas, and use that money for a state-run insurance?
  • cbracketdash 2y ago
    Naive answer, but I think this exists and is called the FAIR plan. See here: https://stateline.org/2025/01/16/california-fires-show-states-last-resort-insurance-plans-could-be-overwhelmed/ https://stateline.org/2025/01/16/california-fires-show-state...
    • manmal 2y ago
      That one doesn’t discriminate by location I think?
• pontifier 2y ago
  Insurance is such a crutch for some people, but it shouldn't be. If something is worth doing, it's worth doing whether you have insurance or not. In my opinion, the amount of resources spent on buying insurance would, in almost every case, be better spent on prevention rather than after the fact mitigation.
  • thaumasiotes 2y ago
    > If something is worth doing, it's worth doing whether you have insurance or not. You're forgetting about insurance fraud.
  • dottjt 2y ago
    It's that "in almost every case" that's the problem. The whole point of insurance is to cover that case where it does happen, irrespective of how unlikely it is. Case in point, my partner was diagnosed with a very, very, very rare terminal cancer at 32. Insurance turned out to be a great investment for us.
  • jopsen 2y ago
    > If something is worth doing, it's worth doing whether you have insurance or not. Taking a mortgage that allows you to buy a house you'll pay off over 30 years and then sell when you retire requires insurance. Without insurance the investments we make in ours homes would need to be a lot smaller. I'm not saying it's a bad idea, just that it's not without significant impact.
• tobyhinloopen 2y ago
  American, living in area prone to natural disasters: "Is the WHOLE WORLD becoming uninsurable?" The answer is obviously "no" since there are other parts of the world that don't live on a hurricane highway nor build houses made from firewood in an area prone to wildfires.
  • etchalon 2y ago
    We're bad at so very many things while thinking we're the best at everything.
    • anonymou2 2y ago
      don't worry, pretty soon you're gonna be great...
  • nejsjsjsbsb 2y ago
    Climate change enters the chat...
    • adrianN 2y ago
      Even pessimistic scenarios don't predict threats to buildings (other than war, which to my knowledge never was insurable) in most areas of the world.
      • agsnu 2y ago
        A significant portion of human structures are located close to the coast (seaborne trade having been a huge enabler of economic development for a few hundred years) and are exposed to flooding from rising sea levels, or built in valleys that are increasingly at risk from flooding due to far-above-long-term-historic-norms precipitation runoff (higher atmospheric temps lead to more energy in weather systems; see eg massive floods in Europe in the past few years).
        • adrianN 2y ago
• coding123 2y ago
  [dead]
• euroderf 2y ago
  Does it make any sense to talk about the foundations and the upper structures as being separately insurable ? Can foundations be reused ?
  • lionkor 2y ago
    I assume the foundations are concrete, and the rest is wood, cardboard and any combination of the two, so I could see that the foundation would survive a fire
    • infecto 2y ago
      Get out of here, who is building a home out of cardboard?
      • gertop 2y ago
        Drywall is two sheets of paper/cardboard cladding (increasingly) low density gypsum. Soundproofing material is also often made of cardboard (though we do have alternatives for that, unlike drywall).
        • infecto 2y ago
          Right, so the house is not constructed out of cardboard. Soundproofing in my part of the US is often rockwool and not cardboard.
          • lionkor 2y ago
            Well it contains cardboard and wood, so it's made of cardboard and wood, among other non-flammables. If I say the house I live in is made of stone, brick, cement and rocks, obviously you know it has windows and insulation, and whatnot. It's still made of stone.
            • infecto 2y ago
              Yes of course you are right, we describe homes based on the component that makes up 1% of total volume. Get out of here with your silly statement. Drywall may have a layer of paper/cardboard but that does not make it a cardboard home. Modern exteriors often use cement board, with a plastic vapor barrier. We don't say the home is made out of plastic and wood. Saying so is just to create a reaction.
• photonthug 2y ago
  > This is the intrinsic limit of political fixes: we take the risks and losses and transfer them to others lacking the political power to contest the transfer. This hits hard and close to home. While my heart goes out to everyone that’s shouldering misfortunes, I’m wary of the “private profits, public risks” phenomenon getting even more out of control. Obviously we can’t afford to disappoint all the people that were forced to jump into an outrageous housing market all at once, they need affordable insurance, and also still expect to 10x their property investment, particularly in coastal areas. If we don’t do this, it will be another huge blow to the shrinking middle class. Meanwhile, the flyover states with fewer hurricanes and wildfires will subsidize coastal insurance basically due to strength of Californias market clout, and yet flyover states won’t ever see a windfall from their own rising property values. Since remote employees in flyover states often get less salary for the same work, they are already subsidizing rent for higher density areas. Regardless of where you live, everyone should recognize that this is unsustainable and divisive.
• phtrivier 2y ago
  Former CEO of AXA, a major French insurer, famously announced that a world at +4°C would be "uninsurrable" [1]. That was 10 years ago. It's true that most predictions about climate are wrong - most of the time, they're optimistic. (Not always, fortunately [2]) [1] https://www.leparisien.fr/economie/business/special-cop21-un-monde-plus-chaud-de-4-degres-sera-impossible-a-assurer-selon-le-pdg-d-axa-30-11-2015-5326047.php https://www.leparisien.fr/economie/business/special-cop21-un... [2] https://www.theclimatebrink.com/p/emissions-are-no-longer-following https://www.theclimatebrink.com/p/emissions-are-no-longer-fo...
  • igravious 2y ago
    +4°C is to the upper end of projections if it did (which is not probable) happen it'd take until the end of the century if we were to get there the entire world will be a different place; everything will have advanced so we won't be insuring our present world with our current knowledge and current tech but a future world with future knowledge and future tech
    • omgwtfbyobbq 2y ago
      Not everything advances. We still have houses built in the 1800s/1900s that are usable in predictable/similar climates/circumstances. A changing climate changes that. Sure, we could bulldoze everything and build new stuff that can handle a +2C, +3C, +4C, etc... world, but that's expensive.
      • lm28469 2y ago
        There are 2b+ people living in "inadequate housing", don't have sewers, don't have running water right now, we can't even fix the problem now, we're not going to fix it better when 2b more need AC to survive every summer https://unhabitat.org/news/13-jul-2023/the-world-is-failing-to-provide-adequate-housing https://unhabitat.org/news/13-jul-2023/the-world-is-failing-...
      • 9dev 2y ago
        It's not just expensive. Steel and concrete are some of the largest drivers of CO2 emissions and toxic waste, in the ballpark of 15%! So really the only sane choice is to avoid building new homes whenever possible and try to keep old houses in use as long as possible.
• cft 2y ago
  The Third world has never been insurable. Insurance, supermarkets with self-checkout, home order delivery, all these things are only possible in high trust developed societies.
  • Ekaros 2y ago
    Home delivery works perfectly well in less developed society. As wages are so much lower it is very much cheaper to deliver to door and possibly even get documentation for signature. Big issue in the end is cost of living. Which affects everyone and most of things in live.
    • trollbridge 2y ago
      The problem with home delivery in a “low trust” area is that your delivered items will get stolen, unless you can manage to stay at home all day to receive deliveries.
      • gertop 2y ago
        Porch pirates are a huge problem in America and shop lifting has gotten so bad that many products are locked behind glass doors... It's wild how people here have blinders and think that these things only apply to "lesser" countries.
        • cft 2y ago
          Those problems are relatively recent and are getting worse
• fishstock25 2y ago
  The term "uninsurable" is not linked to "too expensive" or (equivalently) "too high risk". It's linked to "unpredictable". The business insurances are in is a business of statistics. As long as you can model things giving you an expected value and a standard deviation, you can offer an insurance policy which gives you X amount of profit with Y amount of risk, and the insurance premiums are adjusted such that the insurance's risk for negative profit is negligible, according to the model. What does it mean for climate change? Current insurance models apparently don't work well, so they don't dare to offer policies in certain areas. But just like city planners need to adjust (build further away from shore, higher up, build in flooding protections) and home owners do (AC, think twice if you want a basement) and farmers (choice of crops, irrigation systems), so do insurances by finding better models that allow them to have better statistics. My expectation in the long run is that insurances will be offered again, but with so high premiums for certain areas (of high risk) that it will just be too expensive to live there. Which is fine. Nobody lives on the moon either. And the public shouldn't be paying for somebody's privilege to have a nice waterfront property in a hurricane area. TL;DR: The current public discourse about this topic conflates predictability with cost when talking about "insurability". They are very different things.
  • lambertsimnel 2y ago
    > What does it mean for climate change? ...think twice if you want a basement Why is climate change a problem for basements? Is it to do with flooding? If floods are likely to affect basements, doesn't that suggest an opportunity for sacrificial basements?[0] [0] "The construction of concrete ground structures or sacrificial basements is a recognised solution for construction in areas of high flood risk. The habitable spaces are raised a minimum of 600mm above the level of design flood risk, while the basement area can provide additional nonhabitable storage space." https://www.basements.org.uk/TBIC/Building-Legislation/Planning.aspx https://www.basements.org.uk/TBIC/Building-Legislation/Plann...
• 8bitsrule 2y ago
  Fire insurers could begin ploughing some of their take back into educating clients, helping them harden their homes, and making sure clients are up-to-date on fire codes. As the world changes, businesses should expect to have to remodel their product.
• stuaxo 2y ago
  This is an existential problem for the insurance industry and they should fight the oil industry as such.
• misja111 2y ago
  Everything is insurable, it's just a matter of making the premium high enough. If people are willing to pay it, that's another question.
• mikhailfranco 2y ago
  If insurance and property taxes are proportional to property price, and property prices grow faster than incomes, then cost of ownership will eventually become unaffordable to existing residents. A similar argument works if insurance is just based on reconstruction cost, but construction costs inflate faster than incomes. If properties become unaffordable, then to restore equilibrium, property prices must fall, incomes must rise, or lower-income residents will sell to higher-income purchasers. If there are few higher-income purchasers, property prices will fall. Property taxes could be cut, or decoupled from property values (e.g. poll tax), but that never happens. If the risk really is high, there is no practical insurance available, and all purchasers are rational, then the price may go to zero. An example of an irrational purchaser would be one who assigned high status to a beach house, even in the face of threats from coastal erosion, hurricane floods or tsunamis.
  • lambertsimnel 2y ago
    I don't disagree, but... > Property taxes could be cut, or decoupled from property values (e.g. poll tax), but that never happens. Couldn't the total property tax take be set to be proportional to incomes, shared between households in proportion to property price? > If the risk really is high, there is no practical insurance available, and all purchasers are rational, then the price may go to zero. Rational purchasers might reason that: 1) they need a home 2) unless they own a home they'll have to rent 3) even an uninsurable home could be expected to be habitable for a while 4) if rent for the duration of expected habitability exceeds transaction costs and property taxes for some uninsurable home, it could be worth a nonzero amount
  • greenavocado 2y ago
    Possibly one of the most inane phrases ever uttered about modern governments is Oliver Wendell Holmes’s oft-quoted phrase stating that “taxes are what we pay for civilized society.” This reflected the naïve view, often pushed in the eighteenth and nineteenth century, of the so-called “social contract.” According to this idea, we pay taxes, and in return the state provides order, protection, and all the blessings of civilization. Presumably included among all those taxpayer-funded civilizational “services” provided by governments one can find “fire suppression.” But, you wouldn’t know it from watching tens of thousands of residents flee their homes in southern California and Los Angeles County as fires rage. As of Wednesday at midday, five different fires in southern California are still zero-percent contained. Nor is this some hard-to-reach rural area with few roads and little infrastructure. These fires are right in the middle of suburban cities and towns. Yet, it is all apparently too much for lavishly-funded government agencies to handle. Indeed, government authorities in Los Angeles County and California had neglected infrastructure to the point that it became useless in many areas in terms of battling the blazes.
• InDubioProRubio 2y ago
  If history shows one thing- that is that a ton of political problems are just technological problems solvable with surplus bribery - and the fact that we have a ton of political problems indicates we have a misallocation of technological problem solving ability, away from what are the foundations of society, towards "luxury" perverted incentivized problems created by a wealth bubble. A million thinkers working and thinking about block chains instead of energy or fertilizers or carbon capture. This bubble and its misallocation shadow has to die, for the system to reboot.
• thrance 2y ago
  Again, insane that the president elect does not believe in climate change and chose to blame supposed DEI practices in California's firefighters while the fire was burning. Nothing will change, houses will be rebuilt the same way in the same place.
• amelius 2y ago
  As long as so many things are not accounted for properly (negative externalities), what good is it to talk about the world being insurable or not? It's like putting a bunch of monkeys in the cockpit of a rocket and then asking if you can insure it.
• bArray 2y ago
  From my personal experience in the UK, a few annec-data points: A friend owns a Land Rover with such a notoriously bad engine that insurers refuse to insure it. Land Rover had to make their own car insurance [1]. Another friend owns an electric car that is becoming increasingly uninsurable. I'm told that due to the battery, any significant collision defaults to a complete destruction of the vehicle and not a repair. The second-hand market for electric cars is also terrible, almost no car dealer will touch them in the UK. Another friend had a car that was insured for £5k, but it was actually worth more. An accident occurred that completely destroyed the car in a fire, and they offered £1.5k. They approached the insurer and said if £1.5k is adequate to replace the vehicle, then they could simply drop a vehicle off instead. Eventually they increased the amount to £2.5k, half of their own estimate, and far less than the vehicles actual worth. Another friend got into an accident and was permanently injured. They got an initial offer from the other insurance company, which their insurance said to decline as they believed they should expect more. Several years of slow progress, with the original insurer shutting down and passing their work to several other insurers, they were told too much time had elapsed and they should have gone for the original amount. They offered a £50 "good will gesture" and then closed the case. In the UK we have the Financial Ombudsman for insurance disputes [2], which after review decided that £50 was perfectly adequate. Another friend had their vehicle temporarily ceased by the police (the police were wrong to do so in this case, but you have zero right to appeal). They lost one of the sets of keys for the vehicle and scratched the car. The police told the person there was nothing they could do, and to claim on the insurance. They instead paid for the damage themselves, because the insurance premiums on such a claim would not be worth it. Just tonight I saw something similar where somebody's mirror was damaged in a hit & run, choosing to fix it themselves to avoid insurance premiums increase. I used to send out parcels and insure them, but several parcels arrived damaged (admitted by the couriers) and they said they needed proof of packaging the items correctly. From therein I would video the packaging of all items and something occurred again, but they made it impossible to actually use their insurance. My point is this: Getting insurance is becoming increasingly difficult, but also getting the insurer to honour their agreement is becoming increasingly difficult. In the UK you are legally required to have car insurance, but they are clearly robbing people with no recourse to justice. The system is already broken and not fit for purpose. [1] https://insurance.landrover.co.uk/ https://insurance.landrover.co.uk/ [2] https://www.financial-ombudsman.org.uk/consumers/complaints-can-help/insurance https://www.financial-ombudsman.org.uk/consumers/complaints-...
• HenryBemis 2y ago
  Some years ago I contracted for a mega-big-global insurance company. They would spread leaflets/internal publications on "Risk Profile for the Year 20##" every year. And they would issue updates every Q or H. Insurance companies monitor every-little-thing. If it hasn't rained for X days in Z country, they KNOW IT, monitor it, and accordingly change policies, premiums, etc. I always tell people that the most lucrative job (imho) is "Actuary" (https://en.wikipedia.org/wiki/Actuary https://en.wikipedia.org/wiki/Actuary) so for anyone who is young enough to make a career change or have kids on the verge of picking directions/professions, "Actuary" for-the-win!!
• Cthulhu_ 2y ago
  It's a financial problem, ultimately. Living in Antarctica is difficult and expensive because of the conditions, but with enough money it's manageable. California is not very hospitable on its own but with human intervention it was made liveable. But that is now running out, because e.g. the water supply is no longer adequate for what is used. But this is the difficult situation we find ourselves in; due to climate change, hospitable areas are no longer hospitable, and while you can throw money at the problem, it becomes exponentially more expensive to continue to live there. If this continues, it will trigger a (mass) migration. This can be applied everywhere, and the phrase "climate change will trigger mass migrations" has been uttered many times already. It however feels like people only considered this to be a problem in e.g. the global south, affecting poor people because they don't have the financial means to shape the earth and their living conditions by throwing money at the problem. I live in the Netherlands that for hundreds of years has thrown money and resources at the problem that it's below sea level and prone to flooding. We're still managing, but still get flooding in some places due to e.g. heavy rains deeper in Europe. But if the sea level goes up enough, either we'll have to spend billions in building higher sea walls... or abandon regions entirely. The worst case predictions mention a 2.5 meter sea level rise by 2100, that'll definitely test our infrastructure to put it mildly. (this comment was a reply first but moved it to a top level one because I added my main article comment as well).
• anovikov 2y ago
  Real solution: assess risks and mandate building houses that can withstand those risks. Hurricanes? Find out what is the maximum possible hurricane and mandate construction standards that a house will withstand it with minimum damage (24" reinforced concrete walls etc). Same for fire.
• giorgioz 2y ago
  It seems everyone is on the same "We will find new solutions to a new problem". I totally agree. Here is a list of all new solutions we need: 1) not insure places at higher risk 2) mass desalinification 3) fix US hot climate grids sparkles and/or place them underground 4) Street corridors to isolate fires in neighborhood 5) Build with more fire-resistant materials 6) Install automated hydrant towers with cameras able to spray water on fire remotely (it's done in Spain on the edge of forests and urban areas) 7) Pass on the costs of maintaining of living in expensive risky areas to the people living there and/or give them benefits to move to unpopulated areas with no risk 1) Not all the world will suffer equally from climate change. The parts that are at higher risk should not be insurable so that new housing will not be built there but somewhere else. 2) The idea there won't be water because it doesn't rain it's ridiculous. We live on a planet literally made of water. We'll develop mass production de-salinification plants and have enough water. We need to keep investing and improving that technology. I think having water artifically priced at a low price won't help the development of the desalinification industry. So water should cost more NOW that we can afford it to reflect the R&D cost of it that we must make to have water later. 5) Hot countries don't tend to have plenty of wood to build with. Forests grow with more rain. Building with wood in Spain and Italy is very rare. LA got his wood shipped from somewhere further out. Let's build with other materials in arid fire-prone zones. Yes it's perfectly possible to have houses that are both more-fire-resistant and more-earthquake resistant.
  • drysine 2y ago
    > We'll develop mass production de-salinification plants and have enough water. And then you'll have the brine problem.
    • grvdrm 2y ago
      I'm asking naively and honestly: is there a solution to brine? Believe it's pumped directly back into ocean at the moment.
      • throwup238 2y ago
        Desal plants use static mixers to mix the brine with a bunch of ocean water and pump it back out. The specifics depend on the local ecology and ocean currents but it’s a matter of making the outfall pipes long enough (they’re kilometers long usually).
• wesselbindt 2y ago
  The question this article seems to ask is "is the world becoming insurable while maintaining a profit margin?", not "is the world becoming uninsurable?" These are different questions, with different answers.
  • trollbridge 2y ago
    Insurance profit margins are razor thin. Many insurers pay out more in claims than they collect in premiums, and the difference is made up with interest and other returns on investments from the insurer’s massive reserves. Insurers are strictly regulated at the state level. They have to keep enough reserves to pay a surge in claims. And they have to collect enough premiums to pay out an average claim volume, or else the state requires them to shut down.
• jopsen 2y ago
  > The other way the world is becoming uninsurable is much of what we take for granted--abundant, affordable resources, products, food and fuel, for example--is not guaranteed, and cannot be insured by political or technological means. Fuel is not guaranteed, but renewables, batteries, heat pumps, EVs and possible nuclear does increasingly give us a technological option for ensuring power. It's fair to ask if economics will drive us to adopt these technologies on a wide enough scale before we run out.
  • trollbridge 2y ago
    I’m not sure how heat pumps and batteries “ensure power”. Building far more nuclear would create green jobs, high paying jobs, and ensure widespread power, but the current trend is to close nuclear power plants and burn natural gas instead.
    • jopsen 2y ago
      If you're willing to put down 10-30k USD on solar and batteries, you can probably cut the cable. At least most of the year, depending on where you live. Yes, nuclear would be great, but the time to make that decision was 20 years ago.
• benrutter 2y ago
  Really interesting reading - looks like there's a lot of comments here along the lines of things that could be done to build more fire/flood/huricane resistant housing. I don't want to detract away from those points, but it's definitely worth saying that, at present, we're polluting CO2 into the atmosphere at a very large and to some extent avoidable rate. Climate change is already happening, but the extent to which it happens is still down to us - we can and need to do lots to improve flood resistance in, say, Florida, but we can also stop parts of Florida ending up below sea level too.
• richrichie 2y ago
  Not one paper cited. Just random recitation of climate change hysteria tropes. Life on earth had dealt with 120 meters of sea level rise. So please.
• sirsinsalot 2y ago
  What amazes me about watching californians interviewed about the wild fires is the discourse heads towards conspiracy and corruption: - It's all part of planned land grabs and clearances - They don't want to pay to protect us And so on. Nobody once mentioned the real driving factor of increasing incidences of natural disaster: climate change. I wouldn't insure that attitude either.
• alwilson56 2y ago
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• spjt 2y ago
  I also know almost nothing about insurance other than what I've observed as a policyholder. Two things I would note though: 1) Maybe there needs to be some adjustments to how risk pooling is done. I live in Florida, so my homeowner's insurance is ridiculously expensive, but my property isn't really at risk from hurricanes etc, being very far inland. Realistically my property isn't any more at risk of anything than any property anywhere else in the country. 2) There doesn't seem to be enough flexibility in the offers. Most people seem to think insurance should cover any losses, but really people only need insurance to cover losses that they cannot recover from. I'd take a $100K deductible on my homeowner's insurance if it was offered and lowered my premiums significantly, but it's my understanding the law won't allow that.
• dskrvk 2y ago
  Bloomberg recently did an excellent series on just this issue (including insurers of last resort in different states). The first part: https://www.bloomberg.com/features/2024-home-insurance-real-estate-crisis/ https://www.bloomberg.com/features/2024-home-insurance-real-...
• danans 2y ago
  > Risks and losses cannot be extinguished, they can only be transferred to others. At least for risks like wildfires, we can reduce future risk by rebuilding homes using wildfire resistant techniques and materials. The problem in LA (exacerbated by the climate-change driven conditions) was that most of the burned neighborhoods were built adjacent to fire prone wildlands during an era when homes were built like matchboxes, almost designed to burn. Add the hurricane strength wind, and each building became a blowtorch. Fiber cement siding, minimal eaves, and metal roofs are straightforward ways to reduce wildfire contagion risk of buildings. There have been numerous experiments done to demonstrate how effective this approach is at significantly reducing combustibility of buildings. Cutting back trees near houses to create defensible space is also pretty straightforward.
• runeks 2y ago
  I'm no insurance expert, but I know that insurance usually doesn't cover what's called force majeure — ie. "great forces" such as natural disasters. That's because insurance doesn't work if all insurees (or a large proportion) need to be compensated at the same time. So my question is: is it even possible to insure against these events — e.g. hurricanes, forest fires, earthquakes — given that all insurance takers may need to collect compensation at once (in which case the price of a house insurance would need to be at least the same as the price of a new house).
• prmoustache 2y ago
  I think the best solution is to own much less. People keep wanting to live in huge space that they barely use, then buy a fuckton of appliances they use once or twice a month at the maximum and hoard stuff like there is no tomorrow. Then they cry when they lose everything or that nobody want to insure their pile of crap. Just insure the minimum to live comfortably. It is much lower than what you can think of. Since I have been moving every 4 to 5 years I have been focusing on never hoarding too much stuff. My appartment can burn, I will be fine and as long as I can find a small roof[1] for me and my family (1 partner 2 teenagers) and we could buy back what we need to live comfortably with less than 10k€ and then rebuild gradually to live in a normally sized[2] appartment/house. [1] by my standards, which I rate at 20 to 25sq/m per person living in the household. [2] a bungalow, yurt, caravan or large camper would be enough for a disaster recovery.
  • lazystar 2y ago
    > Then they cry when they lose everything Yes, that's a normal human response. It's ok to have emotions.
    • prmoustache 2y ago
      Yes but OTOH between drugs/addiction, homelessness, traffic, healthcare, consequences of global warming, loneliness epidemy, crime, it is hard to have empathy when you see a whole country complaining of self induced misery.
      • lazystar 2y ago
        Are the people that lost everything the same people that caused the addiction crisis, or the traffic crisis, or the crime epidemic, or the lonelinsless epidemic, or the healthcare situation? No. Even if they had homes in Malibu, the ones who caused those situations would not have lost everything.
        • prmoustache 2y ago
          It is a collective culpability really.
• Waterluvian 2y ago
  Something neat about the insurance industry is that it seems to be immune to irrationality. Whether or not someone believes in climate change, premiums are a function of actual measured risk. If risk goes up, premiums go up. And because being accurate at assessing risk is directly connected to company performance, they’re likely one of the best places to go to get your finger on the pulse of what’s actually happening. The one time this falls apart is when the government puts their finger on the scale and creates insurance that runs at a loss so that people can keep rebuilding in practically uninsurable locales. I guess another nice thing about this is that the insurance company and you both have aligned incentives. Neither of you want to see claims being made. So they really care that you’re doing whatever you can to reduce risk. I bet some of this is wrong, based on an incomplete read of the system, so please educate me. :)
• jobs_throwaway 2y ago
  > the entire idea of being an "insurer of last resort" is based on an unlimited supply of money to fund losses that no longer make financial sense Key insight here. Insurer of last resort == bag-holder for negative EV proposition.
  • pc86 2y ago
    Insurer of last resort == taxpayers bailing out people who can no longer afford to live in their multi-million dollar properties but refuse to sell and move.
    • njovin 2y ago
      TBF the best example of a program like this that currently exists is the National Flood Insurance Program which covers many sub-multi-million dollar homes and is billions of dollars in the hole.
      • pc86 2y ago
        It's a pretty astounding mix of "being the most expensive insurer that exists for a particular parcel" and "completely unable to fulfill its obligations in the event of any medium- or large-scale disaster." Hence my use of the term bailout.
• lasermike026 2y ago
  Insurance needs to be not-for-profit or a government enterprise. Physical projects and infrastructure should not be started until risk is assessed. Speculators and go-go finance has ought to be constrained. As for myself, I am choosing alternative ways to plan, finance, build, and manage infrastructure project. The current systems is a non-starter for most people under 50.
  • rs999gti 2y ago
    > Insurance needs to be not-for-profit or a government enterprise. There are many examples of this in the insurer of last resort, which are non-profit or government insurance when the private insurance can no longer cover. Insurers of last resort have the same issues with denying claims and not paying out like the private insurers. If you read the OP article, the only people asking for not-for-profit or government insurance are basically asking for infinite money, which is both a non-starter and impossible. What really should be done is private insurers raising premiums to match risk. This may mean some consumers will be priced out of insurance policies.
    • palmfacehn 2y ago
      >This may mean some consumers will be priced out of insurance policies. It will also further incentivize innovation in safety features.
      • to11mtm 2y ago
        Politically speaking it easily becomes untenable. (Even if, the conversation could lead to better solutions.) Existing homeowners could easily get excluded from insurance, and/or be 'locked-in' on their home due to inability to sell it vs cost to make it salable. There are examples even from the CA fires of properly designed and landscaped houses doing very very well amidst structures now practically uncrecognizable in original form. Most of the tech is there, but attempts to force it would have n-order effects leading to the political unpopularity.
• teeray 2y ago
  The problem is that in American home-buying, insurance is often compulsory for a purchase with a mortgage. This makes sense from the bank's perspective--they want to insure their collateral. However, the system doesn't really have an answer for "what happens when their collateral becomes uninsurable?" Even though lenders have force-placed insurance, even those insurers can deny coverage in certain circumstances (e.g. flood plain). This puts insurers in a position to de-facto foreclose on not just one person's house, but swaths of houses in regions they (as an industry) deem risky. I'm not sure what the answer is here other than forcing insurers to insure (which would raise premiums for everyone), or creating meta-insurance of some kind (insurance against becoming uninsured).
  • trollbridge 2y ago
    If a property is uninsurable, it can be bought for cash. The actual land value can still be mortgaged, too. Would you want to hold collateral that has a high risk of becoming worthless? You would effectively be self insuring it and would have to price that into a loan you offered.
    • teeray 2y ago
      > Would you want to hold collateral that has a high risk of becoming worthless? Of course not, the problem is that all parties were a-okay with the purchase in the first place, and the banks are trying to change the terms when they realize their hand is a losing one after many turns of the game. Sometimes that’s life, and the corporations should be forced to lose instead of changing the rules so the homeowner loses instead.
      • trollbridge 2y ago
        The rules are that you have to maintain casualty insurance in your property in order to keep the mortgage. If you don’t want to do that, the lender will try to obtain insurance on its own and bill you for it. The bank is actually the loser here. Property becomes uninsurable, they still hold the collateral, and the borrower can simply walk away on a non-recourse state like California.
• uludag 2y ago
  > That the private-sector can trigger crises that have no political or technological fix is on very few pundits' radar. Interestingly, there seems to a number of cultural solutions to this problem. Like, imagine if the people of LA adopted a fondness for living in dense urban environments, and a reluctance to "live near nature," the problem of wildfires becomes much more tractable. Or for example, a culture of maintenance (forests, power infrastructure, infrastructure fireproofing, risk preparedness, etc.), like outlined in the book "The Innovation Delusion," could very well reduce risk a considerable amount. Unfortunately our civilization is too much stuck in its traditional ways to consider such solutions.
• harrison_clarke 2y ago
  the world is always insurable the more volatile it is (and the less you've mitigated the risks), the more expensive your insurance gets
  • 1attice 2y ago
    This seems willfully naive. As with any market, there will be a price that the market cannot bear; and if your 'floor', your minimum policy price offering, is too high for your market, then insurance (as an asset class) no longer has product-market fit. QED.
• giantg2 2y ago
  The really issue is that most people don't understand insurance. People reduce or stop caring when they know insurance will cover things. In my opinion this leads to higher losses and higher costs. Especially when people choose more expensive things.
• gwbas1c 2y ago
  > If the state or federal government offers an open checkbook--we'll pay any and all losses, no questions asked--then those ultimately paying these astronomical bills--the taxpayers--will reasonably ask: why are we subsidizing people to rebuild in places that are clearly no longer habitable due to the probabilities of another fire, flood or hurricane? There's two options: 1: Pay people to leave, perhaps 80% of the fair market value as of a certain date. 2: Pay people for their loss, but do not allow them to rebuild. (Unless the house is built to stricter standards, and meeting those standards might not be covered by the loss.)
• bagels 2y ago
  The graph is potentially misleading in a few ways. Population has increased, more houses to get destroyed. House prices outpace CPI. Costs went up, but so did revenue for the above reasons. Obviously those factors are independent of hurricane and fire size and frequency.
• billfor 2y ago
  As long as you have population growth without increasing land , the density of people will increase and the more damage per square foot will increase.
• 404mm 2y ago
  I live in North Texas, and I see a similar pattern in home and car insurance as well. Our main local threat is hail. Well, and the tornadoes, but while very destructive, tornadoes create fairly geographically limited damage. Hail can cover whole cities at a time. Car insurance became quite expensive. My premium is about $2,200 / 6mo (no accidents, no speeding, no claims in about 10 years) for two cars and two drivers. For some reason, 80% of people choose to park outside while they have a 2-car garage available. Usually packed with crap. They find it easier to have their cars totaled every 4-6 years. For home insurance, my policy is almost $4,800/yr now! While making some coverage adjustments, I noticed that my insurance company no longer offers a choice of lower deductibles for hail/wind. It’s a fixed percentage relative to my property value, currently showing as nearly $15k as the cheapest option. That’s more than 50% of the replacement cost! (I know that because I had my roof replaced twice in the last 10 years.)
  • _heimdall 2y ago
    What's the rough value for your two cars? I live in a similar climate where hail and tornados are both a risk, though hail is a little less likely here than where you are. Admittedly we have cheap cars, but our car insurance for two drivers is closer to $850 for the year (full coverage with a reasonable deductible). Insurance costs have seemed to adjust to a combination of more severe weather conditions, but they also have to fix much more complicated and expensive cars today too. A simple fender bender can be thousands to fix, heck I recently heard about a $5,500 bill when a newer Ford got water in the headlight and fried pretty much the entire electrical system.
  • surajrmal 2y ago
    Do you own higher end vehicles or possibly an EV? Or you're seeing those sorts of rates with something like a Honda Accord?
    • 404mm 2y ago
      1yo and 3yo “technically” luxury brands. But the car values combined is under $100k
• notatoad 2y ago
  Insurance is America’s best method of pricing externalities. If America is becoming uninsurable, maybe they should look into other methods of addressing or minimizing those externalities. Like requiring buildings be built to a standard where they can survive normal weather events, not building in disaster prone areas, not building in sprawling huge developments that eat up a ton of natural space and create a huge urban woodland interface, and trying to slow the pace of climate change by not dumping so much co2 into the atmosphere.
• lawlessone 2y ago
  Obviously insurance companies, and i of course, would prefer if nobody anywhere ever had accidents or got sick etc And i'd love it every lottery ticket, and horse i ever bet on was a winner Feels like insurance companies just don't want to do their job. They're getting paid to take someone's risk and then refusing to accept it.
  • amarka 2y ago
    Not sure if this is accurate. It seems they’re refusing to take the risk.
    • lawlessone 2y ago
      they only want sure thing bets these days. Imagine I bet on a horse and then demanded the bookies pay out because it wasn't forecast to rain
• ashryan 2y ago
  In my NYC neighborhood, we seem to be going through a whole slew of businesses closing shop within the last year and change. One obvious reason is rent hikes. But as one of my favorite local bars was closing, one of the staff mentioned that insurance was really starting to kill them. We don't live in a flood-prone part of NYC, so I'm curious: is insurance for retail space really going up dramatically across the board in NYC, or was this a single, subjective understanding of a situation?
  • jlarocco 2y ago
    It's possible insurance prices were rising specifically for them - because they had a lot of claims, for example - and not necessarily for everybody.
  • gainda 2y ago
    when i hear stories like that i think it's a ripple of effect of paying out for others but then i also recall seeing how much the industry started paying out to political interests after citizens united, too
  • Hilift 2y ago
    Yes, retail insurance is up. This is due to crime and theft. In some cases, it's the we don't want your business/headache rate hike. NYC has about 835,000 unauthorized immigrants. That is up from about 400,000 in 2022. https://capitaloneshopping.com/research/shoplifting-statistics/ https://capitaloneshopping.com/research/shoplifting-statisti... https://www.thecity.nyc/2024/02/21/shoplifting-surge-nyc-small-businesses/ https://www.thecity.nyc/2024/02/21/shoplifting-surge-nyc-sma... https://nypost.com/2024/05/20/opinion/nyc-crime-wave-continues-with-21k-plus-shoplifting-complaints-for-2024-so-far-all-thanks-to-lefty-dems/ https://nypost.com/2024/05/20/opinion/nyc-crime-wave-continu...
• greenthrow 2y ago
  People have lost their homes and everything they own to a natural disaster that was not under their control. I don't care where you live in the world, this could happen to you. The lack of empathy and victim blaming in these comments is absolutely revolting. I am done with this site. It has been taken over by heartless people with zero intellectual curiosity. Good riddance.
  • CatWChainsaw 2y ago
    It's always been filled with smug self-important techbro shitlibertarians (edit: with egos more fragile than literal snowflakes). Luckily, what's they've sent around is starting to come back and they reeeeally don't like consequences.
• markus_zhang 2y ago
  Judging from my experience (house built in non hazard suburb and maintained every few years), Yes. The thing is that with the additional cost of climate change, a lot of these houses do not have the capacity to go through a once-in-100-years event, as they start to occur more frequently. We just had a water backflow from the city main pipeline last August. Pretty much everyone was impacted, and insurance cost went up for those that were not impacted anyway. So to make the house insurable, it requires: 1) massive city infrastructure rebuilding, and 2) everyone pays a lot more to install additional "modules" in their houses. For example I already have a backflow valve but if things get worse and water starts to accumulate close to the bottom of the house I'll need a very expensive French drain, something like 60k CAD. It's not going to break me, but it's 3-4 years of saving. I can't imagine what happens if we get another once-in-100-years storm this summer. I'll probably leave the basement bare without floor and won't bother to claim it.
• gmuslera 2y ago
  Define uninsurable. In present world that means that someone will bet a lot of money nothing bad will happen to you, and you will pay them for long to keep that bet on. And that will work for that someone because the kind of bad things they give money for should be extremely rare, its like a reverse lotto. But if things become not so rare, or the unexpected rare events affect at once too much people, then becomes not so profitable for them. But that doesn't mean that the concept may still be valid for the end user in a way or another, just that in the other end you may have a different kind of actor or mitigation of risk. That those events become far more common is not random or an act of some god, i.e. taxes for fossil carbon usage or other economic action towards those actors meant to have a fund for those cases. Or having a personal saving plan instead of giving that money to someone else, that in average may work better for most. Or force insurance companies to keep playing even when the odds are not so extremely favourable for them.
• maherbeg 2y ago
  Why don't insurance companies mandate significant fire abatement in new builds to be insurable? While it may not be possible to save every house, I wonder how many houses could have been saved with a thought behind "how can we minimize damage in a wildfire scenario"
  • ceejayoz 2y ago
    In Australia, this is handled at the building code level, as well.
  • lnwlebjel 2y ago
    This is happening already, it has happened to my neighbors. As resident of CA in a neighborhood which previously was not, but now probably is, 'fire prone' I fully expect to hear from my insurance company to provide evidence of defendable space and other modifications to minimize the likelihood of structure fire. I've read that once more than about 5-10 house were on fire, there was really no hope of containment, due to the orientation of the streets relative to the wind, the proximity of houses, and the intensity of the wind. Thus the key is prevention -- not letting the wild land fire get to the first 5-10 houses.
• skirge 2y ago
  There are different stategies for risk mitigation and delegation is only one of them.
• WalterBright 2y ago
  Risks are only uninsurable if the government puts a ceiling on the premiums.
• steveBK123 2y ago
  Probably more that we spent decades since mass adoption of AC moving 10s of millions of people into previously lightly inhabited areas, then repeatedly bailed them out with government money to rebuild when disaster struck. Add to that the general rich mans disease of building anything in America being slow & expensive, so each rebuild is more expensive than the last, well beyond just inflation.
• ojagodzinski 2y ago
  USA != World.
• slowmovintarget 2y ago
  The article lumps in the L.A. fires but the exit of insurers from that market was due to price controls, voted in by California residents.
• andrewclunn 2y ago
  Get rid of the federal guarantee for homes that are deemed too risky for private insurance. Stop privatizing gains with publicly backed safety nets and people will engage in less risky behavior. But get ready to be labelled as heartless if you back or even suggest such.
• ninalanyon 2y ago
  The title should be: Are some parts of the United States becoming uninsurable.
• Cypher 2y ago
  I'll insure you for cost + half... it's not a matter of insurance it's the price of which it comes in at.
• phendrenad2 2y ago
  Good. Building houses in tsunami-prone areas, areas downstream of large dams, and in known forest fire areas is stupid and insurance companies get to be the little boy who says "the emperor has no clothes" first.
• w10-1 2y ago
  This is a great opportunity for developers to rebuild with greater density. It's not clear how extraordinary the losses are - by how much home insurance losses actually outpace home-price inflation (not CPI). For the moment let's set aside legitimate concerns of climate change or land-use policy inducing unanticipated risk. Insurance is systemic in the sense of pervasive, but the question is whether the crisis is a controllable excursion from stability, or itself amplifies the problem. The key factor in the 2008 crisis was how foreclosures reduced prices causing more foreclosures and higher borrowing costs - a vicious cycle. With insurance, homes are already affected. What other specific markets? Does insurance company diversification spread the impact from real estate costs to other industries? The destabilizing mechanism is insurer exit after over-exposure. Over-exposure comes not from extra assets, but from mis-pricing. US Insurance is a private market facility, so pricing is competitive. If a competitor prices insurance below your risk-assessed value, your incentive is to meet their price and try to make it up in other markets or through better investments. This tendency would get worse in times of strong investment growth. Thus the investment-dependent insurance industry loses when investments fail, and also tends to lose after investments have been winning. Insurance profitability in the last two decades may reflect a sweet spot of stock market performance more than improvements in risk-assessment. Assuming over-exposure, then what? Both low prices and availability depend on diverse and competitive suppliers. After an insurer has suffered major losses in a market, particularly to the point of viability, they lose the confidence of both investors and customers -- and insurance depends entirely on that belief of reliability. So their best response is to simply leave that market, to maintain their reputation in other markets. Then as more insurers leave a market, prices go up, consuming all available price elasticity - which is very, very significant for homes as fixed assets that are key to other value streams like jobs, schools, etc. Still, that seems limited to housing unless it takes down cross-subsidizing insurance companies. But it does end housing in these markets. Individuals won't be able to buy homes because of the cost of mortgages and insurance. But if insurance is unavailable large companies could own apartments (or even subdivisions where they lease homes) and self-insure or enjoy more tailored insurance. With entire neighborhoods destroyed by fire, developers could rebuild newer, denser housing. And insurers could stay in business by settling with policy holders using money combined with a stake in the new neighborhood corporation. That's the ideal solution, but it won't happen at neighborhood scale because it would involve too many coordination costs. The state (California) would have to effectively take all the property to avoid hold-outs, and then arrange with various insurance companies and developers. So the economic solution is for developers to buy up plots of burned-down neighborhoods. A single small developer could use California's SB-9 to build 4 units where there was one. And larger developers could buy a 4 adjacent plots and build a 30-unit apartment. Both could self-insure, or be well-served by insurance company that focuses on protectable, high-density housing. Doing that at middling scale - lots of complex transactions - would make a good business, albeit not the typical YC. You'd combine a small tech firm with a boutique law firm, add a government relations team. You'd have to be up and running quickly to use the crisis to get the policies you need and start coordinating developers who are sure to be in demand.
• bitmasher9 2y ago
  I often hear people bring up the point that wood buildings are a risk for wildfires and brick/concrete would be safer. When I did some research on this topic years ago I concluded that brick/concrete is much less stable in an Earthquake, which is also a concern for LA. Is it possible to build earthquake resistant concrete structures?
  • jandrewrogers 2y ago
    Yes, you can build reinforced concrete structures rated to not collapse during a M8-9 earthquake. However, the quantity of steel and reinforcement required for the concrete structure to have sufficient strength makes it expensive and labor intensive to build. The US has been pioneering other construction techniques using welded steel plates instead of reinforced concrete. They have excellent seismic resistance and are much cheaper to build because you don't need to place rebar.
• jurgenaut23 2y ago
  > That neither is a solution to the actual problem is glossed over, because as a society, we've become accustomed to the idea that there is a political solution to all problems. THIS. I have started thinking a lot about this recently, and this isn't a lot less obvious that it sounds at first. We tend to think that, if we find _some_ consensus to fix a problem, this will be fixed. But many problems emerge now that no consensus, no matter how global, will not fix. And even that very idea that we are a reasonable species and we will converge to some consensus-based solution isn't actually true.
• ChuckMcM 2y ago
  The answer is, of course, no. (Betteridge's law and all that) Are there going to be massive changes in building codes? Yes. Will that make owning a building more expensive? Yes. Will the pundits tell you it is the fault of the what ever political party is in power? of course they will. What is true is that 'pre-global warming' designed infrastructure is going to become uninsurable because it will be regularly destroyed. Once a track record is established for 'global warming aware' infrastructure, the cost to insure it will become more clear. If you were wondering "How will global climate change effect me personally?", this is it. Your city's costs are going up as it has to rebuild itself to a new standard, if you own a home your insurance costs are going up until you tear it down (or it gets destroyed) and rebuild it to the new standard.
• Nifty3929 2y ago
  Everything is insurable - for the right price. But if you aren't allowed to pay that price then I guess that's a problem.
• ForHackernews 2y ago
  I guess the question is how much should the rest of America have to subsidize the folks who want to live near the beach?
• qgin 2y ago
  There is a point where insurance changes from a thing that spreads risk to simply a pre-payment plan for a likely occurrence.
• L-four 2y ago
  Maybe having houses so expensive nobody can afford to buy them and the people how already own them can't afford insurance on them was a bad idea.
• yellowapple 2y ago
  "The world" is only becoming "uninsurable" because insurance companies want to have their cake and eat it too: they want your insurance premiums every month, but they don't want to pay out, so they'll find every excuse under the sun to do the former and not do the latter. This applies to more than just houses, of course - as anyone who's been denied coverage for healthcare can attest (and then the executives of these corporations wonder why people might want to kill them...). If insurers were publicly-owned and publicly-operated, instead of being profit-driven corporations, then maybe being "uninsurable" wouldn't be such a common phenomenon.
• TeMPOraL 2y ago
  What I learned from this thread is that in the US, apparently, the government is preventing insurance companies from raising the rates, because the rates corresponding to actual risk and damages would be stupidly big, insurers have no choice but to quit the market and then even the wealthiest homeowners can't get insurance at any price. So what's stopping insurance companies from inventing some kind of fractional insurance? I.e. if insuring a 200sqm house at real rates would be stupidly expensive to anyone but the top 5% wealthiest owners, then instead of quitting the market, why not create a policy that insures the whole house but covers only N sqm from it, priced at real rate / sqm, and it's up to the buyer to decide on N? This way the wealthiest would still have access, everyone else would sort of have it on paper, but it would create space for innovations (and "innovations") in figuring out how to cover the whole thing for regular people - and long-term, incentives for better building and moving elsewhere. Markets have powerful mechanisms for changing peoples' behavior, but don't work at all in binary "take it or leave it" situations.
• 752963e64 2y ago
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• stogot 2y ago
  I don’t live in a dangerous area and my insurance is 2x what it was 4 years ago, and the agents j spoke to expect it to go up 30-40% again this summer. It’s unaffordable already!
• to11mtm 2y ago
  Weird thing to note, my understanding is that at least in the US, the accident rate and overall cost for claims in Auto has gone up substantially post COVID. Nobody's quite sure how much of it is the extended time not driving, knock-on effects of isolation, or something else [0], but it -is- something insurance companies are paying attention to from various angles. Another factor less noted, is the challenge of insuring various parties against 'nuclear verdicts' [1], at least as far as 'is the world becoming becoming uninsurable'... [0] - Could be anything from Visibility of Full-Size SUVs/Trucks, changes in policing of speeding, increase in vehicles with HP/weight ratios outside of experience range, long COVID, the answer isn't fully clear... [1] - Basically, a legal gap where certain states don't cap judgements such that, in the 'intended reason' allows a clear historical negligence to increase damages, in the less than intended reason you've got lawyers going on fishing expeditions to raise their claim amount... IDK how I feel about it but am giving my understanding.