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Is the world becoming uninsurable?

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Re: Is the world becoming uninsurable?

#371

Post by mikhailfranco »

If insurance and property taxes are proportional to property price, and property prices grow faster than incomes, then cost of ownership will eventually become unaffordable to existing residents.

A similar argument works if insurance is just based on reconstruction cost, but construction costs inflate faster than incomes.

If properties become unaffordable, then to restore equilibrium, property prices must fall, incomes must rise, or lower-income residents will sell to higher-income purchasers. If there are few higher-income purchasers, property prices will fall.

Property taxes could be cut, or decoupled from property values (e.g. poll tax), but that never happens.

If the risk really is high, there is no practical insurance available, and all purchasers are rational, then the price may go to zero.

An example of an irrational purchaser would be one who assigned high status to a beach house, even in the face of threats from coastal erosion, hurricane floods or tsunamis.

Re: Is the world becoming uninsurable?

#372

Post by robocat »

lionkor wrote: post #305
wakawaka28 wrote: post #297

Earlier quoted context omitted.

The fire problem can be managed by burning or removing some of the dead wood, and building adequate water storage. Apparently California has been neglecting those two problems for decades.

It could also be helped by not building houses out of cardboard. The amount of walls in Europe that you could punch a wall into is low enough that you shouldnt try.

And give many of Europe's house's a small rattle and they would fall down.

I'm in Christchurch, 6.2 Earthquake in 2011 and wooden framed houses dealt with it pretty good - they flex - lots of the houses survived and are still used.

Just about anything old and bricky was a deathtrap (fortunately many were unoccupied because condemned after nearby 2010 Earthquake).

Re: Is the world becoming uninsurable?

#373

Post by Ekaros »

cft wrote: post #349

The Third world has never been insurable. Insurance, supermarkets with self-checkout, home order delivery, all these things are only possible in high trust developed societies.

Home delivery works perfectly well in less developed society. As wages are so much lower it is very much cheaper to deliver to door and possibly even get documentation for signature. Big issue in the end is cost of living. Which affects everyone and most of things in live.

Re: Is the world becoming uninsurable?

#374

Post by dcchambers »

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.

I think the problem is less the materials used, and more that urban sprawl has pushed cities to build out into areas they shouldn't be building.

Destroying the wetlands to build houses closer to the ocean has eliminated the natural hurricane protection (from storm surge, at least) that many low lying areas had.

Building into fire-prone hills outside of cities in Southern California was never going to end well.

Re: Is the world becoming uninsurable?

#375

Post by EraYaN »

Snoddas wrote: post #356
itake wrote: post #206

Earlier quoted context omitted.

> 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.

I don't think you quite get how little money it is for these types of operations, 25m is essentially missing 2-3 zeros before it becomes anywhere near usable and even worth it to bother.

Re: Is the world becoming uninsurable?

#376

Post by InDubioProRubio »

If history shows one thing- that is that a ton of political problems are just technological problems solvable with surplus bribery - and the fact that we have a ton of political problems indicates we have a misallocation of technological problem solving ability, away from what are the foundations of society, towards "luxury" perverted incentivized problems created by a wealth bubble. A million thinkers working and thinking about block chains instead of energy or fertilizers or carbon capture. This bubble and its misallocation shadow has to die, for the system to reboot.

Re: Is the world becoming uninsurable?

#377

Post by ekianjo »

nejsjsjsbsb wrote: post #324
tobyhinloopen wrote: post #283

American, living in area prone to natural disasters: "Is the WHOLE WORLD becoming uninsurable?" The answer is obviously "no" since there are other parts of the world that don't live on a hurricane highway nor build houses made from firewood in an area prone to wildfires.

Climate change enters the chat...

Still waiting for the water to flood New York...

Re: Is the world becoming uninsurable?

#378

Post by lambertsimnel »

fishstock25 wrote: post #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 insu…

> What does it mean for climate change? ...think twice if you want a basement

Why is climate change a problem for basements? Is it to do with flooding? If floods are likely to affect basements, doesn't that suggest an opportunity for sacrificial basements?[0]

[0] "The construction of concrete ground structures or sacrificial basements is a recognised solution for construction in areas of high flood risk. The habitable spaces are raised a minimum of 600mm above the level of design flood risk, while the basement area can provide additional nonhabitable storage space." https://www.basements.org.uk/TBIC/Building-Legislation/Plann...

Re: Is the world becoming uninsurable?

#379

Post by ekianjo »

agsnu wrote: post #344
adrianN wrote: post #327

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…

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