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Is the world becoming uninsurable?

charleshughsmith.substack.com

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Re: Is the world becoming uninsurable?

#11

Post by api_or_ipa »

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.

Re: Is the world becoming uninsurable?

#12

Post by amazingamazing »

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.

Re: Is the world becoming uninsurable?

#13

Post by naming_the_user »

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.

Re: Is the world becoming uninsurable?

#15

Post by colechristensen »

api_or_ipa wrote: post #11

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 a…

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.

Re: Is the world becoming uninsurable?

#16

Post by underwater »

bluedevil2k wrote: post #8

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…

Price caps always seem like such a transparent political move.

Re: Is the world becoming uninsurable?

#17

Post by nradov »

api_or_ipa wrote: post #11

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 a…

It's always amazing and disappointing to see how many people actually believe that prices can be lowered by legislative fiat, or that "price gouging" is an actual thing that happens. I guess they would prefer to have shortages instead of paying market rates, and then complain about "greedy big business" or (my favorite) "late stage capitalism".

Re: Is the world becoming uninsurable?

#18

Post by tptacek »

colechristensen wrote: post #15
api_or_ipa wrote: post #11

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 a…

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 un…

You can; it's just expensive.

Re: Is the world becoming uninsurable?

#19

Post by tptacek »

amazingamazing wrote: post #12

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 con…

I think this is a pretty common and au courant take right now.

Re: Is the world becoming uninsurable?

#20

Post by TheOtherHobbes »

api_or_ipa wrote: post #11

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 a…

Which is nice.

But important, useful things will still be burning and flooding, at huge cost to the economy. Which is less nice.

At this point I think we've tipped into a world of complete delusion, where imaginary "markets" are more important than keeping the planet comfortable, stable, and inhabitable.

Also. this, from that most volatile, irrational, and least sensible of all professions - the actuaries:

https://www.theguardian.com/environment/2025/jan/16/economic...

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