Is the world becoming uninsurable? • Hacker News Board

Re: Is the world becoming uninsurable?

#21

Post by wat10000 » Fri, Jan 17, 2025, 2:11 AM UTC

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…

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.

Re: Is the world becoming uninsurable?

#22

Post by mgiampapa » Fri, Jan 17, 2025, 2:11 AM UTC

underwater wrote: post #16

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.

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.

Re: Is the world becoming uninsurable?

#23

Post by Dig1t » Fri, Jan 17, 2025, 2:13 AM UTC

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…

There should be a way to build fire resistant buildings to reduce the cost of insuring them, likely this would be the solution in California without price caps.

You can build out of concrete and use fire resistant materials like metal or tile for the roof and your house is nearly fireproof. These buildings would be realistically insurable in both California or Florida. They would cost more to build, not THAT much more though especially if land costs many millions, an extra 50k - 100k to build out of concrete is a very reasonable expense.

Re: Is the world becoming uninsurable?

#24

Post by ladberg » Fri, Jan 17, 2025, 2:13 AM UTC

mgiampapa wrote: post #22

underwater wrote: post #16

Earlier quoted context omitted.

Price caps always seem like such a transparent political move.

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.

Insurance companies have pretty thing profit margins regardless, even in areas where profits are not capped. It's a competitive marketplace!

Re: Is the world becoming uninsurable?

#25

Post by greenthrow » Fri, Jan 17, 2025, 2:14 AM UTC

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.

Re: Is the world becoming uninsurable?

#26

Post by SideQuark » Fri, Jan 17, 2025, 2:15 AM UTC

osigurdson wrote: post #14

datavirtue wrote: post #7

Part of this is that homes are too fancy and large. All of that translates into elevated costs and risks.

If people like them, they are not too big or too fancy.

It is if they cannot afford them. Most people would love far more than they can afford, but reality wins.

Re: Is the world becoming uninsurable?

#27

Post by tomrod » Fri, Jan 17, 2025, 2:15 AM UTC

ladberg wrote: post #24

mgiampapa wrote: post #22

Earlier quoted context omitted.

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.

Insurance companies have pretty thing profit margins regardless, even in areas where profits are not capped. It's a competitive marketplace!

I'm not sure I believe your factoid. Can you cite? UHC is one of the wealthiest companies in the world.

Re: Is the world becoming uninsurable?

#28

Post by davidw » Fri, Jan 17, 2025, 2:15 AM UTC

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…

I think what I worry about is large-scale migrations of people to 'better' areas and the problems that's going to cause.

Re: Is the world becoming uninsurable?

#29

Post by atleastoptimal » Fri, Jan 17, 2025, 2:16 AM UTC

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.

Re: Is the world becoming uninsurable?

#30

Post by teractiveodular » Fri, Jan 17, 2025, 2:17 AM UTC

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…

As the 173 million strong population of Bangladesh can attest, they can and do live in such places.

"Each year, on average, 31,000 square kilometres (12,000 sq mi) (around 21% of the country) is flooded. During severe floods the affected area may exceed two-thirds of the country, as was seen in 1998."

https://en.wikipedia.org/wiki/Floods_in_Bangladesh

Most of the world does not want to aspire to be Bangladesh, but humans have been living in extremely disaster-prone areas for millennia because the short-term benefits (rich soil etc) outweigh the occasional catastrophic losses.