8 ms·

I was surprised that insurance companies wouldn't cover damage from mine subsidence. I guess the lesson is to never buy property if you can't get insurance to c

I was surprised that insurance companies wouldn't cover damage from mine subsidence. I guess the lesson is to never buy property if you can't get insurance to cover something (wildfire, flood, hurricane, etc) at a reasonable rate since you're all but certain to encounter it eventually and be left on the hook for high costs.

cogman10 1y ago
It's why programs like FEMA are so important. The issue with private insurance when it comes to natural disasters is they don't like losing money (understandable) and the climate is changing. Those two things together mean that this year you could have good insurance that covers freak accidents, but what about next year, or next decade? An area that may have only seen flooding once a century might be predicted to see it once a decade or even once a year. People still live there. Some people lived there with the insurance coverage for those natural disasters only to see it slowly go away or to be outright cancelled. We can't expect that they all migrate.
- sokoloff 1y ago
  > We can't expect that they all migrate. They can’t expect us to cover their losses, especially predictable and repeated losses.
- ndileas 1y ago
  I feel strongly that we should save every human life it's possible to save during disasters. Fema is pretty great at that. However, that doesn't neccesarily imply that there should be flows of money available to rebuild in vulnerable locations. Insurance becoming unavailable or unaffordable is probably the best signal available that someplace is a bad place to live. If you can't afford the price or the risk ... There are lots of other places in the world.
  - cogman10 1y ago
    This assumes you are moving into an area fresh. But what about someone that's been there, potentially for generations? It's one thing to say "don't buy beach front property in the Florida everglades" but what do you do with the millions who already own such property? This came up with hurricane Katrina and Louisiana. Multigenerational communities were completely obliterated. I really don't find "the market said you should move" to be a compelling response.
    - Legend2440 1y ago
      It’s not the market saying that, it’s the climate. The market is just communicating it to you. These places are no longer safely inhabitable due to rising ocean levels. People are going to have to be relocated one way or another.
      - roenxi 1y ago
        Well; some solution has to be found. There are probably options other than relocation - look at Venice. But the market is signalling how much money should be diverted into finding solutions and whether it is cost-effective to do so rather than just moving. And I have no sympathy towards the "been there for generations" argument. The circumstances of your grandma just can't be a reason for what people do in the present - it s too unfair.
        Retric 1y ago
        Venice is an interesting example because most of the population moved off the island for obvious logistical issues. However, tourists love interesting places so the islands have not been fully abandoned. What’s telling is it’s not the kind of model that really scale as the more common it gets the less interesting it becomes. Chicago is a more scalable model, as both raising the city and moving existing housing worked quite well. https://en.wikipedia.org/wiki/Raising_of_Chicago https://en.wikipedia.org/wiki/Raising_of_Chicago
        dredmorbius 1y ago
  - dns_snek 1y ago
    What is the average person supposed to do if their insurance stops covering their home after decades of ownership? Just saying "there are lots of other places in the world" ignores the reality where their only major asset has become close to worthless through no fault of their own, which makes it impossible to relocate without going bankrupt. Should the government assist or are you of the opinion that it's just bad luck that they need to deal with on their own? Personally I think the most rational option would be for the government to build non-profit apartment complexes across the country, but localized in areas that are projected to be safe for 100+ years where affected families could be relocated. I don't think they should be pumping money into rebuilding homes in the exact same vulnerable location though - I don't know if that's happening or not.
    - potato3732842 1y ago
      Even if you ignore the asset value the "just move" opinion is still almost pure ignorance. Normal people who've "put down roots" incur a HUGE cost when they move away from all that. Lives become optimized, you establish relationships with businesses. You make friends and engage in mutually beneficial favor trading. Ripping all that away is probably on the order of a 15-30% reduction in real income depending on the individuals in question.
      - autoexec 1y ago
        Yeah, it's going to suck for a huge number of people who are displaced due to climate change, but "just move" is the increasingly going to be the only option that they have. People who are able to move out of areas that are projected to be hit hardest by climate change should consider moving away sooner rather than later to manage that transition more on their own terms. Globally, we're looking at billions of climate refugees needing to move somewhere and some of them will be displaced Americans. It's not going to be optimized for anybody and even people who don't have to move will be impacted by the influx of people coming into their cities.
    - ndileas 1y ago
      I think this is a classic case for government intervention; buyouts back to state or federal land seems practical and just to me. And the government typically does intervene to help people, just not in the most optimal way IMO; there are stories of people whose homes have been rebuilt multiple times in vulnerable spots. I don't have a clear notion of how common of an issue that is, but I think the natural human tendency to pick a spot and defend it at all costs is shortsighted and leads to tragedy and high costs all around. And then a surprising fraction of people defend ignoring a reliable signal that something has to give... either building practices, or locations, or something else.
- _carbyau_ 1y ago
  I mean, we don't have to expect they will want to migrate. But life is all about how we handle change, both at the personal level and as a society. When people throw money at an IPO only for it to tank we don't go around refunding them. Investments generally are NOT guaranteed, this includes assets like a house. Should society at large be paying for someone's luxury beachfront home to be rebuilt over and over in the face of lack of insurance? Should people ignoring the climate observations and making dumb decisions NOT be penalised by losing their assets? Honestly, there are good answers to this last question - no one wants to see an instant slums and the ongoing effects burdening society. No one wants to see grandma thrown to the curb. To be considered a society one has to act like it, which includes helping those who are down. But not by trying to reset it back the way it was. Not by guaranteeing that people can make decisions - silly or not - with any level of guarantee. Maybe a government buyback for property in an area that is rezoned because of climate reasons. Maybe a change in building standards to make rebuilds more reliable in the face of the new normal. Maybe public housing elsewhere to absorb the impact of such events until people can remake their lives and move on. Feel free to insert better ideas. But the change in circumstances - in this case climate activity - has to be handled or it borders on stupidity.
- lqet 1y ago
  > The issue with private insurance when it comes to natural disasters is they don't like losing money (understandable) and the climate is changing. I strongly believe in mandatory house insurance. We live in an area where full house insurance was mandatory and organized by the government until the 90ies. It was cheap, because it was subsidized and everybody paid in. Then they privatized the insurance, and they weren't mandatory anymore. A relative of mine realized that insurance that would cover flooding would now be nearly twice as expensive in his area as the previous mandatory insurance, so he got one which did not cover flooding. 8 years later, his house was flooded. A few years ago, a family of 5 here became homeless because their house burned down. They did not have any insurance and lost 600,000 EUR and their place to live.
  - sokoloff 1y ago
    Should government’s role be to prevent all dumb decisions that affect only the people/families making dumb decisions? I think auto liability insurance (or an equivalent bond posting) should be mandatory, because it protects others. I don’t think theft or collision insurance should be mandatory (and in fact don’t carry it on some of our cars). Insure against losses that you couldn’t withstand. Don’t (or self-) insure against those that you can easily withstand. No government intervention needed there IMO.
    - autoexec 1y ago
      > Should government’s role be to prevent all dumb decisions that affect only the people/families making dumb decisions? You don't think other people are impacted when families lose their homes and everything they have? Who do you think is going to end up having to pay to house and feed them? Taxpayers. The economic effects on people who still have their house aren't immediate and obvious so it's easy to pretend that nobody else is impacted, but it's almost never the case, especially when it's not about one guy whose house burned down after he tried to save a little extra money by not insuring against fire, but entire communities who lose everything. When government manages insurance and everyone is covered the costs are dramatically lower and everyone is safer. The role of government should be to provide important safety nets to people providing stability and confidence to communities and the economy. Government can do it without needing to continuously stuff their pockets with higher and higher profits like shareholders demand, and without doing everything possible to avoid paying out valid claims the way private insurance companies do in order to protect those profits. While there does come a point where it doesn't make sense for people to continue to live in certain areas, for more typical cases it'd be a major improvement that would save more money than letting people who just want to gamble on the odds get away with not paying for insurance at all. Eventually many of those people lose that game and instead of just upsetting their lives it destroys them while everyone around them pays the higher costs.
- FuriouslyAdrift 1y ago
  FEMA has nothing to do with insurance. They do grants, cover temporary gaps in coverage time for insurance, and coordinate repsonses across regions (multi-state). You are thinking of programs like the NFIP (national Flood Insurance Program)... Unfortunately, programs like this create perverse incentives. People keep building homes where none would be if disasters were priced in.
bsder 1y ago
In Pennsylvania, it's a sop to industry because they magically could find the owners of the mineral rights when fracking became profitable. Those mines still have owners, and they can be found by the state if they really, really want to find them.
- jandrewrogers 1y ago
  Are the current owners of the mineral rights the same people that dug the mines? Owning mineral rights doesn't create liability for existing mines.
  - necheffa 1y ago
    In general, no. Most of the coal companies went bust and the rights are owned by gas and/or fracking companies or consolidated by one of the surviving companies.
  - bsder 1y ago
    > Are the current owners of the mineral rights the same people that dug the mines? Almost certainly not. > Owning mineral rights doesn't create liability for existing mines. I was under the impression that it generally does. However, the documents are generally old paper records (often missing) and fragmented between multiple polities in Pennsylvania. The owners of the mineral rights obviously know who they are but reconstructing the trail from public records is quite time consuming and provides a lot of "plausible deniability". But, boy, once fracking made those mineral rights worth something, the owners sure showed up and found those "missing" records in a real hurry.
    - jandrewrogers 1y ago
      In the US, mineral rights are land use rights. It allows you to extract minerals, which has priority over some other land use rights. You are responsible for restoring lower priority use rights only to the extent you have deprived them. You are not responsible for any deprivation of use rights you did not create, which existing mines would be. I have owned water, mineral, grazing, and other rights in the western US in environments where these were all considered valuable. YMMV.
fatbird 1y ago
You can't insure against something you can't reliably quantify. Mine subsidence is extremely difficult to predict.
- dmurray 1y ago
  Predicting things like that is exactly the job of insurers and reinsurers. They're very good at it and it actually becomes easier at scale. How many houses will be made uninhabitable by subsidence in the US in the next 5 years? I predict more than 100 and fewer than one million. There, that's a prediction. A team of actuaries armed with historic data could massively improve it. This is much easier than the same kind of prediction for earthquakes or hurricanes, which have tail risk of unlikely but devastating events. If insurers don't want to cover this kind of risk, it's either because it's too small to be worth spending time on, or so predictable that it's not worth spreading the risk (better to just condemn the handful of houses built on top of known mines and move on).
Legend2440 1y ago
You should read your insurance contract carefully so you aren’t hit by any nasty surprises. Earth movement in general - from landslides to sinkholes to shifting foundations - is excluded from most home insurance policies.
- ajb 1y ago
  This may depend on jurisdiction. UK buildings insurance usually covers subsidence (although it may then be difficult to sell the property, as any buyer will have difficulty getting their own insurance even after a repair) I don't know specifically about mines or sinkholes, but I don't think they are generally excluded. However one difficulty would be that buildings are generally insured up to the value of the rebuilding cost, IE what it would take to put the building back after it was completely destroyed. But in the case of a mine or sinkhole, the land itself may also be unusable. In an expensive city the rebuild cost may be only a fraction of the cost of buying an equivalent home, including the land it sits on.
- gkanai 1y ago
  In Japan, except for certain areas in the top major metros, only land has value. Buildings lose value over the life of a 30 year mortgage due to the changing nature of earthquake regulations for buildings. It will almost always be cheaper to tear down and build new than retrofit. Its also why Japan has very creative residential architecture- owners can build what they want without caring about resale. Many non Japanese who are buying in Japan without understanding this fundamentally different aspect of real estate in Japan do so at their own risk.
potato3732842 1y ago
As a general rule don't expect insurance to cover anything where there isn't an easily sue-able responsible party unless you're specifically paying for that type of event to be covered.
lqet 1y ago
We recently bought a house, and we learned that it is surprisingly difficult to get insurance that covers damage from asteroids / meteors / satellite parts. It is AFAIK impossible to get insurance that covers war damage.
- vharuck 1y ago
  Even if an insurance policy covered war, the chance of collecting the full amount would be almost zero. War levels extremely large areas, most buildings aren't bomb-resistant bunkers, and fighting drags on. There's no insurer who could handle paying all the claims they'd receive at the same time. Only governments could handle that level of funding.

cogman10 1y ago

It's why programs like FEMA are so important. The issue with private insurance when it comes to natural disasters is they don't like losing money (understandable) and the climate is changing. Those two things together mean that this year you could have good insurance that covers freak accidents, but what about next year, or next decade? An area that may have only seen flooding once a century might be predicted to see it once a decade or even once a year. People still live there. Some people lived there with the insurance coverage for those natural disasters only to see it slowly go away or to be outright cancelled. We can't expect that they all migrate.

sokoloff 1y ago
> We can't expect that they all migrate. They can’t expect us to cover their losses, especially predictable and repeated losses.
ndileas 1y ago
I feel strongly that we should save every human life it's possible to save during disasters. Fema is pretty great at that. However, that doesn't neccesarily imply that there should be flows of money available to rebuild in vulnerable locations. Insurance becoming unavailable or unaffordable is probably the best signal available that someplace is a bad place to live. If you can't afford the price or the risk ... There are lots of other places in the world.
- cogman10 1y ago
  This assumes you are moving into an area fresh. But what about someone that's been there, potentially for generations? It's one thing to say "don't buy beach front property in the Florida everglades" but what do you do with the millions who already own such property? This came up with hurricane Katrina and Louisiana. Multigenerational communities were completely obliterated. I really don't find "the market said you should move" to be a compelling response.
  - Legend2440 1y ago
    It’s not the market saying that, it’s the climate. The market is just communicating it to you. These places are no longer safely inhabitable due to rising ocean levels. People are going to have to be relocated one way or another.
    - roenxi 1y ago
      Well; some solution has to be found. There are probably options other than relocation - look at Venice. But the market is signalling how much money should be diverted into finding solutions and whether it is cost-effective to do so rather than just moving. And I have no sympathy towards the "been there for generations" argument. The circumstances of your grandma just can't be a reason for what people do in the present - it s too unfair.
      - Retric 1y ago
        Venice is an interesting example because most of the population moved off the island for obvious logistical issues. However, tourists love interesting places so the islands have not been fully abandoned. What’s telling is it’s not the kind of model that really scale as the more common it gets the less interesting it becomes. Chicago is a more scalable model, as both raising the city and moving existing housing worked quite well. https://en.wikipedia.org/wiki/Raising_of_Chicago https://en.wikipedia.org/wiki/Raising_of_Chicago
        dredmorbius 1y ago
- dns_snek 1y ago
  What is the average person supposed to do if their insurance stops covering their home after decades of ownership? Just saying "there are lots of other places in the world" ignores the reality where their only major asset has become close to worthless through no fault of their own, which makes it impossible to relocate without going bankrupt. Should the government assist or are you of the opinion that it's just bad luck that they need to deal with on their own? Personally I think the most rational option would be for the government to build non-profit apartment complexes across the country, but localized in areas that are projected to be safe for 100+ years where affected families could be relocated. I don't think they should be pumping money into rebuilding homes in the exact same vulnerable location though - I don't know if that's happening or not.
  - potato3732842 1y ago
    Even if you ignore the asset value the "just move" opinion is still almost pure ignorance. Normal people who've "put down roots" incur a HUGE cost when they move away from all that. Lives become optimized, you establish relationships with businesses. You make friends and engage in mutually beneficial favor trading. Ripping all that away is probably on the order of a 15-30% reduction in real income depending on the individuals in question.
    - autoexec 1y ago
      Yeah, it's going to suck for a huge number of people who are displaced due to climate change, but "just move" is the increasingly going to be the only option that they have. People who are able to move out of areas that are projected to be hit hardest by climate change should consider moving away sooner rather than later to manage that transition more on their own terms. Globally, we're looking at billions of climate refugees needing to move somewhere and some of them will be displaced Americans. It's not going to be optimized for anybody and even people who don't have to move will be impacted by the influx of people coming into their cities.
  - ndileas 1y ago
    I think this is a classic case for government intervention; buyouts back to state or federal land seems practical and just to me. And the government typically does intervene to help people, just not in the most optimal way IMO; there are stories of people whose homes have been rebuilt multiple times in vulnerable spots. I don't have a clear notion of how common of an issue that is, but I think the natural human tendency to pick a spot and defend it at all costs is shortsighted and leads to tragedy and high costs all around. And then a surprising fraction of people defend ignoring a reliable signal that something has to give... either building practices, or locations, or something else.
_carbyau_ 1y ago
I mean, we don't have to expect they will want to migrate. But life is all about how we handle change, both at the personal level and as a society. When people throw money at an IPO only for it to tank we don't go around refunding them. Investments generally are NOT guaranteed, this includes assets like a house. Should society at large be paying for someone's luxury beachfront home to be rebuilt over and over in the face of lack of insurance? Should people ignoring the climate observations and making dumb decisions NOT be penalised by losing their assets? Honestly, there are good answers to this last question - no one wants to see an instant slums and the ongoing effects burdening society. No one wants to see grandma thrown to the curb. To be considered a society one has to act like it, which includes helping those who are down. But not by trying to reset it back the way it was. Not by guaranteeing that people can make decisions - silly or not - with any level of guarantee. Maybe a government buyback for property in an area that is rezoned because of climate reasons. Maybe a change in building standards to make rebuilds more reliable in the face of the new normal. Maybe public housing elsewhere to absorb the impact of such events until people can remake their lives and move on. Feel free to insert better ideas. But the change in circumstances - in this case climate activity - has to be handled or it borders on stupidity.
lqet 1y ago
> The issue with private insurance when it comes to natural disasters is they don't like losing money (understandable) and the climate is changing. I strongly believe in mandatory house insurance. We live in an area where full house insurance was mandatory and organized by the government until the 90ies. It was cheap, because it was subsidized and everybody paid in. Then they privatized the insurance, and they weren't mandatory anymore. A relative of mine realized that insurance that would cover flooding would now be nearly twice as expensive in his area as the previous mandatory insurance, so he got one which did not cover flooding. 8 years later, his house was flooded. A few years ago, a family of 5 here became homeless because their house burned down. They did not have any insurance and lost 600,000 EUR and their place to live.
- sokoloff 1y ago
  Should government’s role be to prevent all dumb decisions that affect only the people/families making dumb decisions? I think auto liability insurance (or an equivalent bond posting) should be mandatory, because it protects others. I don’t think theft or collision insurance should be mandatory (and in fact don’t carry it on some of our cars). Insure against losses that you couldn’t withstand. Don’t (or self-) insure against those that you can easily withstand. No government intervention needed there IMO.
  - autoexec 1y ago
    > Should government’s role be to prevent all dumb decisions that affect only the people/families making dumb decisions? You don't think other people are impacted when families lose their homes and everything they have? Who do you think is going to end up having to pay to house and feed them? Taxpayers. The economic effects on people who still have their house aren't immediate and obvious so it's easy to pretend that nobody else is impacted, but it's almost never the case, especially when it's not about one guy whose house burned down after he tried to save a little extra money by not insuring against fire, but entire communities who lose everything. When government manages insurance and everyone is covered the costs are dramatically lower and everyone is safer. The role of government should be to provide important safety nets to people providing stability and confidence to communities and the economy. Government can do it without needing to continuously stuff their pockets with higher and higher profits like shareholders demand, and without doing everything possible to avoid paying out valid claims the way private insurance companies do in order to protect those profits. While there does come a point where it doesn't make sense for people to continue to live in certain areas, for more typical cases it'd be a major improvement that would save more money than letting people who just want to gamble on the odds get away with not paying for insurance at all. Eventually many of those people lose that game and instead of just upsetting their lives it destroys them while everyone around them pays the higher costs.
FuriouslyAdrift 1y ago
FEMA has nothing to do with insurance. They do grants, cover temporary gaps in coverage time for insurance, and coordinate repsonses across regions (multi-state). You are thinking of programs like the NFIP (national Flood Insurance Program)... Unfortunately, programs like this create perverse incentives. People keep building homes where none would be if disasters were priced in.

bsder 1y ago

In Pennsylvania, it's a sop to industry because they magically could find the owners of the mineral rights when fracking became profitable. Those mines still have owners, and they can be found by the state if they really, really want to find them.

jandrewrogers 1y ago
Are the current owners of the mineral rights the same people that dug the mines? Owning mineral rights doesn't create liability for existing mines.
- necheffa 1y ago
  In general, no. Most of the coal companies went bust and the rights are owned by gas and/or fracking companies or consolidated by one of the surviving companies.
- bsder 1y ago
  > Are the current owners of the mineral rights the same people that dug the mines? Almost certainly not. > Owning mineral rights doesn't create liability for existing mines. I was under the impression that it generally does. However, the documents are generally old paper records (often missing) and fragmented between multiple polities in Pennsylvania. The owners of the mineral rights obviously know who they are but reconstructing the trail from public records is quite time consuming and provides a lot of "plausible deniability". But, boy, once fracking made those mineral rights worth something, the owners sure showed up and found those "missing" records in a real hurry.
  - jandrewrogers 1y ago
    In the US, mineral rights are land use rights. It allows you to extract minerals, which has priority over some other land use rights. You are responsible for restoring lower priority use rights only to the extent you have deprived them. You are not responsible for any deprivation of use rights you did not create, which existing mines would be. I have owned water, mineral, grazing, and other rights in the western US in environments where these were all considered valuable. YMMV.

fatbird 1y ago

You can't insure against something you can't reliably quantify. Mine subsidence is extremely difficult to predict.

dmurray 1y ago
Predicting things like that is exactly the job of insurers and reinsurers. They're very good at it and it actually becomes easier at scale. How many houses will be made uninhabitable by subsidence in the US in the next 5 years? I predict more than 100 and fewer than one million. There, that's a prediction. A team of actuaries armed with historic data could massively improve it. This is much easier than the same kind of prediction for earthquakes or hurricanes, which have tail risk of unlikely but devastating events. If insurers don't want to cover this kind of risk, it's either because it's too small to be worth spending time on, or so predictable that it's not worth spreading the risk (better to just condemn the handful of houses built on top of known mines and move on).

Legend2440 1y ago

You should read your insurance contract carefully so you aren’t hit by any nasty surprises. Earth movement in general - from landslides to sinkholes to shifting foundations - is excluded from most home insurance policies.

ajb 1y ago
This may depend on jurisdiction. UK buildings insurance usually covers subsidence (although it may then be difficult to sell the property, as any buyer will have difficulty getting their own insurance even after a repair) I don't know specifically about mines or sinkholes, but I don't think they are generally excluded. However one difficulty would be that buildings are generally insured up to the value of the rebuilding cost, IE what it would take to put the building back after it was completely destroyed. But in the case of a mine or sinkhole, the land itself may also be unusable. In an expensive city the rebuild cost may be only a fraction of the cost of buying an equivalent home, including the land it sits on.
gkanai 1y ago
In Japan, except for certain areas in the top major metros, only land has value. Buildings lose value over the life of a 30 year mortgage due to the changing nature of earthquake regulations for buildings. It will almost always be cheaper to tear down and build new than retrofit. Its also why Japan has very creative residential architecture- owners can build what they want without caring about resale. Many non Japanese who are buying in Japan without understanding this fundamentally different aspect of real estate in Japan do so at their own risk.

potato3732842 1y ago

As a general rule don't expect insurance to cover anything where there isn't an easily sue-able responsible party unless you're specifically paying for that type of event to be covered.

lqet 1y ago

We recently bought a house, and we learned that it is surprisingly difficult to get insurance that covers damage from asteroids / meteors / satellite parts. It is AFAIK impossible to get insurance that covers war damage.

vharuck 1y ago
Even if an insurance policy covered war, the chance of collecting the full amount would be almost zero. War levels extremely large areas, most buildings aren't bomb-resistant bunkers, and fighting drags on. There's no insurer who could handle paying all the claims they'd receive at the same time. Only governments could handle that level of funding.