Is the world becoming uninsurable? • Hacker News Board

Re: Is the world becoming uninsurable?

#131

Post by Sabinus » Fri, Jan 17, 2025, 4:46 AM UTC

Daz1 wrote: post #104

forgotoldacc wrote: post #40

Earlier quoted context omitted.

Thinking technology will always save us is no different from divine or magical thinking. Lots of societies and civilizations have collapsed. Some were straight up wiped off the earth and we don't even know what happened to them. Western civilization has had a good 500 years, and America has had a good 250 years, but that doesn't mean things can never go bad in the future. Plenty of places have had catastrophic drough…

>Plenty of places have had catastrophic droughts, famines, and plagues. Nearly half of Europe died a few times from plagues. Most natives in America were absolutely wiped out from disease and other issues. Tens of millions died of famine in China last century. Tsunamis washed away and killed hundreds of thousands in Indonesia and Japan this current century. Conveniently you selected pre-technology examples. How curio…

Technology can't save you from famines when there isn't enough sunlight to grow crops for a season or two. One good supervolcano and civilization might collapse or at least take such a hit as to be utterly transformed. Billions dead, etc.

Re: Is the world becoming uninsurable?

#132

Post by forgetfreeman » Fri, Jan 17, 2025, 4:47 AM UTC

Daz1 wrote: post #104

forgotoldacc wrote: post #40

Earlier quoted context omitted.

Thinking technology will always save us is no different from divine or magical thinking. Lots of societies and civilizations have collapsed. Some were straight up wiped off the earth and we don't even know what happened to them. Western civilization has had a good 500 years, and America has had a good 250 years, but that doesn't mean things can never go bad in the future. Plenty of places have had catastrophic drough…

>Plenty of places have had catastrophic droughts, famines, and plagues. Nearly half of Europe died a few times from plagues. Most natives in America were absolutely wiped out from disease and other issues. Tens of millions died of famine in China last century. Tsunamis washed away and killed hundreds of thousands in Indonesia and Japan this current century. Conveniently you selected pre-technology examples. How curio…

One thing worth noting about these agriscience improvements you're touting would be they require a combination of non-renewable inputs and unsustainable amounts of water. There is also the minor issue of unrecoverable topsoil depletion and the steady decline of nutrients in agricultural products tracked over decades. Kicking the can down the road isn't the same as solving the problem.

Re: Is the world becoming uninsurable?

#133

Post by iandanforth » Fri, Jan 17, 2025, 4:48 AM UTC

Sabinus wrote: post #112

Animats wrote: post #107

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…

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.

"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.

Re: Is the world becoming uninsurable?

#134

Post by nullc » Fri, Jan 17, 2025, 4:48 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…

> the insurance rates in Pacific Palisades or on the Florida coast would be so high that no one could afford to live there

I'm not so sure. The Pacific Palisades have astronomical real estate prices. (actually costly property in Florida isn't cheap either). I think the insurance costs would come out of the property prices.

I say this on the basis that the prices the real estate sells for is already what the market will tolerate, if there are other costs to owning it-- then the remaining part the market will tolerate will be less.

Perhaps a result of this is that it may only be realistic to construct lower costs 'disposable' cabins in areas with higher disaster risk... if so, that wouldn't sound like an unreasonable way to allocate resources.

Re: Is the world becoming uninsurable?

#135

Post by [deleted] » Fri, Jan 17, 2025, 4:49 AM UTC

plant-ian wrote: post #68

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 prici…

[deleted]

Re: Is the world becoming uninsurable?

#136

Post by MattGaiser » Fri, Jan 17, 2025, 4:49 AM UTC

harimau777 wrote: post #127

Aurornis wrote: post #72

Earlier quoted context omitted.

> Unfortunately these discussions almost never go well, because it seems that most people have at best a surface level understanding of what insurance is and how it works, and everyone is convinced that it's a full scam and insurance companies are fabricating everything I have the exact same experience when discussing anything insurance related: People have wild assumptions about how much profit insurance companies a…

The profit margin doesn't include things like CEO salary, correct? I could see a scenario where the issue is still corporate greed just not greed that's measured by profit.

Executive pay is such a tiny fraction that eliminating it would be lost in period to period fluctuations.

Re: Is the world becoming uninsurable?

#137

Post by nathanaldensr » Fri, Jan 17, 2025, 4:51 AM UTC

owlbite wrote: post #115

lmm wrote: post #99

Earlier quoted context omitted.

Don't worry, the California government is responding to that by making it illegal to stop offering insurance in the state. That will definitely fix the problem.

Source? Many companies seem to be stopping offering insurance in the state just fine! The most recent moves seem to be relaxing the pricing rules to allow major disaster pricing and recharging reinsurance rates in exchange for insurers offering more policies in high risk areas.

https://www.clydeco.com/en/insights/2025/01/california-wildf...

> The Bulletin was issued pursuant to California Insurance Code section 675.1(b)(1), which states that an insurer “shall not cancel or refuse to renew a policy of residential property insurance for a property located in any zip code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency . . . based solely on the fact that the insured structure is located in an area in which a wildfire has occurred.”

Re: Is the world becoming uninsurable?

#138

Post by hattmall » Fri, Jan 17, 2025, 4:52 AM UTC

Aurornis wrote: post #72

epistasis wrote: post #57

Earlier quoted context omitted.

I've been trying to talk to people locally, a place with lots of homes built in the woodland-urban interface, about the risks of climate change and how insurance will have to change. Unfortunately these discussions almost never go well, because it seems that most people have at best a surface level understanding of what insurance is and how it works, and everyone is convinced that it's a full scam and insurance compa…

> Unfortunately these discussions almost never go well, because it seems that most people have at best a surface level understanding of what insurance is and how it works, and everyone is convinced that it's a full scam and insurance companies are fabricating everything I have the exact same experience when discussing anything insurance related: People have wild assumptions about how much profit insurance companies a…

Health Insurance IS a huge racket. Insurance profits are only a small slice. Executive compensation isn't part of profits. The profits of the required sole source medical supplies company isn't part of insurance profits. The contracts, salaries, benefit packages, overpayments, and waste of healthcare systems and pharmaceutical companies aren't reflected in insurance profits. Just looking at the raw profit percentages returned to shareholders is absolutely meaningless.

You have to look at the entire healthcare picture and realize that insurance is the system driving the exorbitant costs. There is no legitimate reason for healthcare prices to be so insane.

Re: Is the world becoming uninsurable?

#139

Post by nullc » Fri, Jan 17, 2025, 4:52 AM UTC

jmyeet wrote: post #37

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…

> 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.

Re: Is the world becoming uninsurable?

#140

Post by Sabinus » Fri, Jan 17, 2025, 4:53 AM UTC

AlexandrB wrote: post #106

Arainach wrote: post #52

Earlier quoted context omitted.

>We don't live in a world like in 1905 where an earthquake would lead to a fire that burns down an entire city I'm not convinced that that's true, and even if it is a huge chunk of population (world, US, pick your area, it applies broadly) keep fighting to regress us to these periods. People complaining about rules they don't understand is in some sense as old as the existence of rules, but the internet has dramatica…

> At the same time a significant chunk of the population works to defund and defang all government, preventing the existing rules and codes - labor protections, fire protections, food safety protections, etc. - from being adequately monitored and enforced. This isn't helped by actual bad rules and regulations on the books. Some minor examples are the prop 95 warnings on every damn thing or the way CAFE standards work…

>I don't blame some people for wanting to scrap the whole regulatory system after encountering enough of these.

Regulation can used to save lives and improve outcomes, but it can also be used to suppress competitors or favor a particular business practice and stifle innovation.