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Is the world becoming uninsurable?

charleshughsmith.substack.com

351–360 of 1001 posts

Re: Is the world becoming uninsurable?

#351

Earlier quoted context omitted.

Why bother building a better home when it's cheaper to buy insurance and rebuild later? This is why prices are important - sometimes it's sensible to build cheaper houses without these safeties if the risk isn't there, but if the risk does exist then it needs to be priced right to provide that incentive.

How about the cost of your life ? If the house resists the earthquake and you are inside it, you don't die.

Building to protect occupants and building to make the structure salvageable afterwards may be two different goals. Think crumple zones in cars.

Re: Is the world becoming uninsurable?

#352
post #220

Earlier quoted context omitted.

Earthquakes. Options are wood again, or steel and concrete.

Somehow, all these nations around the world with earthquakes still have their houses standing. Why is it always whataboutism with earthquakes when presented with "don't build houses out of matchsticks"?

They do not have their houses standing. Look at the recent earthquake in Turkey and Syria. 60k dead and 150 billion in damage.

Re: Is the world becoming uninsurable?

#353
The term "uninsurable" is not linked to "too expensive" or (equivalently) "too high risk". It's linked to "unpredictable".

The business insurances are in is a business of statistics. As long as you can model things giving you an expected value and a standard deviation, you can offer an insurance policy which gives you X amount of profit with Y amount of risk, and the insurance premiums are adjusted such that the insurance's risk for negative profit is negligible, according to the model.

What does it mean for climate change? Current insurance models apparently don't work well, so they don't dare to offer policies in certain areas. But just like city planners need to adjust (build further away from shore, higher up, build in flooding protections) and home owners do (AC, think twice if you want a basement) and farmers (choice of crops, irrigation systems), so do insurances by finding better models that allow them to have better statistics.

My expectation in the long run is that insurances will be offered again, but with so high premiums for certain areas (of high risk) that it will just be too expensive to live there. Which is fine. Nobody lives on the moon either. And the public shouldn't be paying for somebody's privilege to have a nice waterfront property in a hurricane area.

TL;DR: The current public discourse about this topic conflates predictability with cost when talking about "insurability". They are very different things.

Re: Is the world becoming uninsurable?

#354

Earlier quoted context omitted.

Since you mentioned FL, we have mostly solved hurricane level wind resistant building codes. Hurricane ties are cheap and they work. Anything built post hurricane Andrew has these. There's also materials like Hardi Plank siding, which does add a bit more cost, but effectively surrounds the house in a thin layer of concrete. Flooding is a mixed bag. My house is built substantially up and off the ground above the '100…

That's false. Hurricanes are not getting bigger or more frequent due to climate change. They aren't getting bigger or more frequent at all. NOAA has stated this multiple times and you can read an article addressing it here: https://www.climate.gov/news-features/blogs/beyond-data/can-... It's well known that hurricanes go through multidecadal swings. Why this keeps getting repeated when it's obviously false is beyond…

Great article, scientifically written. I wish it was as confident as you are in your conclusion.

> No, we cannot confidently detect a trend today in observed Atlantic hurricane activity due to man-made (greenhouse gas-driven) climate change. Some human influence may be present

> The importance of this distinction between potential causes of AMV for future hurricane projections is clear: if strong man-made aerosol forcing and volcanic forcing were responsible for most of the “quiet period” of Atlantic major hurricane activity from the 1970s through the early 1990s, then a return to this more “quiet” regime in the coming decades may not occur. But if the “quiet period” of the 1970s through early 1990s (as well as the earlier quiet period of the early 20th Century) was caused mainly by internal climate variability, one would expect to return to relatively “quiet” conditions in the coming decades as the climate swings back and forth between more active and inactive Atlantic hurricane periods. This is an important research question that does not yet have a clear answer.

Meanwhile we continue to see stronger storms.

> Another hurricane metric, the fraction of rapidly intensifying Atlantic hurricanes, was reported to have increased since around 1980 (Bhatia et al. 2019), and they found that this change was highly unusual compared with simulated natural variability from a climate model, while being consistent in sign with the expected change from human-caused forcing. Even so, however, their confidence was limited by uncertainty in how well the single climate model used was representing real-world natural variability in the Atlantic region.

We do know for a fact that the ocean temperatures are rising. Also from your article,

> Global surface temperatures and tropical Atlantic sea surface temperatures have increased since 1900 (by around +1.3 ˚C [+2.3 ˚F] and +1.0 ˚C [+1.8 ˚F], respectively), unlike the reconstructed hurricane counts or U.S. landfalling hurricanes. Finally, a number of studies have found that several Atlantic hurricane metrics, including hurricane maximum intensities, hurricane numbers, major hurricane numbers, and Accumulated Cyclone Energy have all increased since around 1980.

But climate science is about studying a complex system, and finding direct causations is hard.

> However, in a 2019 tropical cyclone-climate change assessment, the majority of authors concluded that the recent hurricane activity increases mentioned above did not qualify as a detectable man-made influences (meaning clearly distinguishable from natural variability).

Another study linked recently from climate.gov (near the bottom) https://www.climate.gov/news-features/blogs/beyond-data/2024...

>[R]ecent studies in attribution science show that climate change is causing an increase in the frequency and/or severity of tropical storms, heavy rainfall, and extreme temperatures.

So at the end of the day, it's fine to say there is no smoking gun, but it is absolutely not 'obviously false'. I think your biases are showing.

Re: Is the world becoming uninsurable?

#355

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…

This is the same logic that almost destroyed the financial system in 2008. "House prices always go up, and there is no reason to think this time will be different". Fine logic that works until it doesn't.

At best your logic works because people get concerned, and work to solve the problem. Once there is a critical mass of people unconcerned, like yourself, that think we will magically adapt and solve the problem, we're screwed.

Re: Is the world becoming uninsurable?

#356
post #206

Earlier quoted context omitted.

They bank it as any insurance company should do. Invest it cautiously. Hire sound decent people to run it with solid levels of accountability (including from a board of directors that is mostly made up of a rotating number of clients). Do it from the beginning of the company. Grow your staff slowly. Build enough of a cushion that can last the company years. Right? Right? I'd run that company well for $250k/annually +…

> They bank it as any insurance company should do. Invest it cautiously. I hope they aren't investing that capital. AFAIK, insurance capital needs to be liquid, for it to be ready for a payout. You still didn't address my point is that $25m/yr is a drop in the ocean. "investing $25m properly" will have zero impact on the business.

It will have atleast be > than zero, and doing it every year instead of giving it away to some overpriced CEO will it will accumulate.

Re: Is the world becoming uninsurable?

#357
Fire insurers could begin ploughing some of their take back into educating clients, helping them harden their homes, and making sure clients are up-to-date on fire codes. As the world changes, businesses should expect to have to remodel their product.

Re: Is the world becoming uninsurable?

#359

Earlier quoted context omitted.

Why bother building a better home when it's cheaper to buy insurance and rebuild later? This is why prices are important - sometimes it's sensible to build cheaper houses without these safeties if the risk isn't there, but if the risk does exist then it needs to be priced right to provide that incentive.

Maybe be there is no longer "cheap" and that's the issue

I don't understand the downvote. I think this hit the nail on its head.

People whine about insurances pulling out. All they want is for somebody else to pay for their risk. It's their choice to live in that area, they should bear the consequences. It's not like it is or has ever been a secret. Climate change is known for decades now. Many people just chose not to "believe" in it. Well, their choice, but now that sh* hits the fan, they shouldn't come whine that everything gets sprayed with poo.

Re: Is the world becoming uninsurable?

#360
post #344

Earlier quoted context omitted.

Even pessimistic scenarios don't predict threats to buildings (other than war, which to my knowledge never was insurable) in most areas of the world.

A significant portion of human structures are located close to the coast (seaborne trade having been a huge enabler of economic development for a few hundred years) and are exposed to flooding from rising sea levels, or built in valleys that are increasingly at risk from flooding due to far-above-long-term-historic-norms precipitation runoff (higher atmospheric temps lead to more energy in weather systems; see eg mas…

Compared to the other challenges climate change poses those are fairly simple engineering problems. The Netherlands manage fine with large parts of the country below sea level.
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