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Is the world becoming uninsurable?

charleshughsmith.substack.com

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Re: Is the world becoming uninsurable?

#141

Post by selimthegrim »

SoftTalker wrote: post #66
greenthrow wrote: post #25

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 Los Angeles fires are not really about climate change. There have been wildfires there for centuries, it's part of the ecosystem.

The Santa Anas getting stronger is very much related to climate change.

Re: Is the world becoming uninsurable?

#142

Post by lotsofpulp »

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.

All employee compensation, including CEO and board of directors, is included in the expenses used to calculate profit margin.

Profit margin is all revenue minus all expenses.

Re: Is the world becoming uninsurable?

#143

Post by doctorpangloss »

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.

Resistant homes will pay nearly the same prices as everyone else. So the cinder block home owner is subsidizing the sticks houses.

Same happens in autos. Monitored safe driving nets at most 10-20% discounts. Biggest factor is age, and even then, difference between 20yo and 35yo driver is 38%.

There are no tricks or deals to insurance.

Re: Is the world becoming uninsurable?

#144

Post by Atotalnoob »

EGreg wrote: post #102
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…

Can’t you say that about any part of LA? Once a fire gets going, it grows and can destroy any neighborhood. Call me crazy but if I was the mayor of LA I’d make them invest heavily in PREVENTION. Cameras and drones all over the place in the forests, to nip fires in the bud (and carch arsonists). I would also make sure that the live video footage would be used only for that purpose. It would use AI at the edge to flag…

Alleyways are good. They help prevent trash and smell from being on the streets people use.

NYC doesn’t have them and the city smells terrible from all of the garbage

Re: Is the world becoming uninsurable?

#145

Post by pizza »

jwagenet wrote: post #98
wuiheerfoj wrote: post #80

Earlier quoted context omitted.

>When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs Do you have any source for this? I’m assuming (because HN) that you had the USA in mind, and it doesn’t pass the sniff test for me given that US insurance fees are more than single digit percentages higher than other high quality care countries with privatised healthcare systems

The issue in the US is that there is no price regulation for different procedures (other than Medicare), plus the providers (hospital chains) are intertwined* with insurance. The end result is everyone charges as much as they can and the premiums need to be high, even if insurance technically negotiates the rates down from the “sticker” price. Insurance companies are willing to take a small percent of profit because…

Right, low profit margins are not a valid argument for why it’s invalid for consumers to suspect there is some inefficiency compared to other markets. Saying the system must be efficient because profits are low is like saying boiling water should be as cheap as 98->99 degrees C because it’s just +1 C - profit margins aren’t as good an indicator of whether there is an unusual amount of disorder in the system, compared to extremely context-sensitive resource costs for hypothetically identical systems.

Re: Is the world becoming uninsurable?

#146

Post by chmod775 »

altairprime wrote: post #121
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…

Note that brick is much worse than wood for wind-stoked wildfires; think ‘explosive fiery-hot shrapnel’ rather than just catching on fire like wood. (This is not a contradiction of your point, just a useful related factoid for the modern era.)

You're going to die if you're around to witness either (if you didn't already pass out from smoke/heat/lack of oxygen). It literally doesn't matter.

The advantage of suburbs in which houses are mostly built from non-flammable materials is that while maybe one or two rows of houses closest to forested areas will likely burn out, there won't be enough calorific potential for the fire to propagate further into the suburb.

Also for firefighting efforts the difference between a house burning out and a house burning down is huge. The former means that most of the fire is already contained in a non-flammable structure, reducing the risk of spreading and also making efforts to quench it with water more effective.

"Brick is much worse than wood for wind-stoked wildfires" is a strange take. If a wildfire is approaching, I'll take a town built from brick rather than plywood any day.

Re: Is the world becoming uninsurable?

#147

Post by [deleted] »

doctorpangloss wrote: post #143
Sabinus wrote: post #112

Earlier quoted context omitted.

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.

Resistant homes will pay nearly the same prices as everyone else. So the cinder block home owner is subsidizing the sticks houses. Same happens in autos. Monitored safe driving nets at most 10-20% discounts. Biggest factor is age, and even then, difference between 20yo and 35yo driver is 38%. There are no tricks or deals to insurance.

[deleted]

Re: Is the world becoming uninsurable?

#148

Post by EGreg »

Atotalnoob wrote: post #144
EGreg wrote: post #102

Earlier quoted context omitted.

Can’t you say that about any part of LA? Once a fire gets going, it grows and can destroy any neighborhood. Call me crazy but if I was the mayor of LA I’d make them invest heavily in PREVENTION. Cameras and drones all over the place in the forests, to nip fires in the bud (and carch arsonists). I would also make sure that the live video footage would be used only for that purpose. It would use AI at the edge to flag…

Alleyways are good. They help prevent trash and smell from being on the streets people use. NYC doesn’t have them and the city smells terrible from all of the garbage

OK it’s not just an alleyway but an entire half of a city block trash heap with dumpsters make one think that they neglected to build anything nice in that fourth corner. Oh and two streets away are tribes of homeless people. Watch the first 5 seconds of my video.

In fact my video literally shows trash on the street as well in SF, as well as homeless.

Seriously, other cities have city hall. There are no dumpsters around it. We have courthouses and government buildings.

Certainly none around Lincoln Center which has the Metropolitan Opera and NYC Ballet and Philharmonic. It doesn’t smell there. There are beautiful fountains etc.

I took some photos of the homeless in SF juxtaposed in front of the skyline in the background. It is very pervasive there. LA and SF seem to be magnets for homeless.

If I was mayor I’d give them all a $50 phone preloaded with gigs including ones from the city, like sweeping the streets and from businesses such as handing out flyers. Have the app unlock mini storage and showers, and help them have digital ID. This ain’t rocket science. Crowdfund the support for each homeless the way we support kids in Haiti. Give them opportunities. But instead the bureaucracy just kicks them around and denies them opportunities without an address.

Anyway…

Re: Is the world becoming uninsurable?

#149

Post by Sabinus »

noirbot wrote: post #108
amazingamazing wrote: post #53

Earlier quoted context omitted.

i unironically believe the insurance is a great signal for pricing externalities. if you want, imo, a comfortable planet, you should want everyone to have to pay, out of pocket, for the risk they’re taking. the result would be people not living in areas that a risky, engaging in behaviors or risking, or partaking in things the contribute to the world becoming more volatile.

But isn't the issue that I may have been living in an area for decades and because the government didn't correctly price/deter externalities, now I can't afford to live somewhere? The companies lobbying for the abilities to pollute and otherwise add risk to the world can afford to pay the higher insurance rates. The folks who live in the areas they put at risk often can't. Insurance costs rising are a good signal, bu…

>they're essentially a way to tax normal people for the faults of governments and major companies

But it's a great way to deliver the signal that '(Climate) RISK IS INCREASING' directly to the voters. If the government socialises the losses, society won't learn the harsh lessons about our changing world quickly enough.

Re: Is the world becoming uninsurable?

#150

Post by pkaye »

Dig1t wrote: post #23
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 mor…

I've been collecting a bunch of links on what things a homeowner can do. Probably the simplest thing is the clear a 5 foot ember resistant zone around the home. So remove greenery and replace wood chips with stone for example. Use fire resistant vents so ember does enter attic or crawlspace. Use Class A fire rated roof (which you can also get for asphalt shingles). If you have wood siding, replace with fiber cement siding...

https://www.insurance.ca.gov/01-consumers/200-wrr/Safer-from...

https://readyforwildfire.org/wp-content/uploads/2024/05/Low-...

https://osfm.fire.ca.gov/what-we-do/fire-engineering-and-inv...

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