People shouldn't have to evaluate the risk involved in living anywhere, that is the job of actuators. Their evaluation is presented to consumers through the pri

People shouldn't have to evaluate the risk involved in living anywhere, that is the job of actuators. Their evaluation is presented to consumers through the price system. If the government didn't bail out homeowners who didn't have insurance, then the risk would be reflected in the price of insurance, and a potential homeowner can then easily compare the utility of living in that location relative to the total cost of owning the home versus any other location. As I said, insurance companies don't even try to offer risky coverage like that because they are competing with bailouts based on compulsory taxation (they are competing with a "free" service). When the government interferes in this case, the consumer is falsely led to believe that the cost of living in that area is lower than it actually is, because they don't have to pay for insurance. Therefore, more people move there than can afford it, and more people need to be bailed out by the government when disaster strikes. It's a vicious cycle.