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Is the world becoming uninsurable?

charleshughsmith.substack.com

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Re: Is the world becoming uninsurable?

#211

Post by daedrdev »

teractiveodular wrote: post #30
colechristensen wrote: post #15

Earlier quoted context omitted.

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 hu…

The cost of labor is extremely high in the US compared to Bangladesh, and that along with building standards, minimum lot size, minimum floor space requirements and required low density zoning (lmao) make these two case very different

Re: Is the world becoming uninsurable?

#212

Post by MagicMoonlight »

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.)

Think about what you’ve just written… you’re saying that a stone building is less safe than a wood building in a fire.

Have we seen any stone cities burn down lately? Because I haven’t seen London burn down since they replaced all the wooden houses with brick in 1666.

Re: Is the world becoming uninsurable?

#213

Post by lostlogin »

CalRobert wrote: post #198
iandanforth wrote: post #133

Earlier quoted context omitted.

"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.

For what it’s worth, you can get a house with no insurance or mortgage. They tend to be cheap. I had an uninsured thatched cottage for a while, it was 68k

You can have a mortgage with no insurance (after purchase day) here in New Zealand. The bank won’t like it, but also won’t know.

Re: Is the world becoming uninsurable?

#214

Post by ahupp »

iandanforth wrote: post #133
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.

"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.

The big risk that we need regulation for is not that insurance charges too much, but too little. There will always be the temptation to charge less than the other guy, get lots of customers and hope nothing really bad happens.

Re: Is the world becoming uninsurable?

#215

Post by School-Cotton »

wuiheerfoj wrote: post #80
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…

>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

That’s because healthcare is unusually expensive in the US, not because insurers’ profit margins are unusually high.

Re: Is the world becoming uninsurable?

#216

Post by d0mine »

kstenerud wrote: post #188
chii wrote: post #170

Earlier quoted context omitted.

> unregulated insurance market; price gouging. with sufficient competition, it is impossible to price gouge. So if there is supposed price gouging, then there must be insufficient competition. Therefore, the source of the lack of competition would need to be removed (ostensibly, by gov't - such as increasing business loans so that new insurance companies can be started).

Or, you need to be pragmatic, realize that you're not gods and won't create a perfect system that can't be exploited, and instead tackle the issue from multiple angles while revising your approach as the exploiters attack. Don't let the perfect be the enemy of good enough.

"good enough" assumes a lot about the rules of the game here. Imagine, the game is: "heads I win, tails you lose" and then read your comment.

Re: Is the world becoming uninsurable?

#218

Post by girvo »

lostlogin wrote: post #213
CalRobert wrote: post #198

Earlier quoted context omitted.

For what it’s worth, you can get a house with no insurance or mortgage. They tend to be cheap. I had an uninsured thatched cottage for a while, it was 68k

You can have a mortgage with no insurance (after purchase day) here in New Zealand. The bank won’t like it, but also won’t know.

Banks in Australia were the same, but some are now starting to demand proof of insurance yearly to counter that loophole.

Re: Is the world becoming uninsurable?

#219

Post by Dracophoenix »

lupinglade wrote: post #210

The problem is the materials used. Greedy developers building junk homes and making bank. People in those areas are able to afford fire resistant housing but most of them are being swindled into buying stick homes. The few properly designed homes fared far better. Code needs to be updated and consumers need to be educated.

A number of those homes were old enough to qualify for social security. I doubt it's reasonable to believe developers could anticipate the environmental conditions that would befall a home some half-century since breaking ground.

Re: Is the world becoming uninsurable?

#220

Post by ohazi »

MagicMoonlight wrote: post #217

What are we betting that the Americans rebuild in wood again? It seems like they never learn. We had a single city fire like this 500 years ago and since then we haven’t… because we built the city back in brick instead of wood.

Earthquakes.

Options are wood again, or steel and concrete.

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