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Is the world becoming uninsurable?

charleshughsmith.substack.com

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Re: Is the world becoming uninsurable?

#651

Post by notabee »

adrianN wrote: post #327
nejsjsjsbsb wrote: post #324

Earlier quoted context omitted.

Climate change enters the chat...

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.

That's not really true. The introduction of so much extra energy into the atmosphere is going to make weather extremes worse all over the world, and harder to predict as historical models become less relevant. Large scale pattern changes like the AMOC shutting down are going to completely change many local weather patterns so that e.g. places that have little history of tornados will start having them, or places that used to be too wet for wildfires will suddenly experience them in extreme drought conditions. Despite scientists' best efforts, we're running a global experiment with no control group and predictions will only become more difficult the harder we push the system into a new state.

Re: Is the world becoming uninsurable?

#652

Post by wrfrmers »

nradov wrote: post #627
marcosdumay wrote: post #575

Earlier quoted context omitted.

Hy from Brazil... You know, a poor country. We make single-level houses with a reinforced concrete structure, because it's cheap. You know what isn't cheap? Wood. Wood is incredibly expensive to put into a shape, even if you are willing to cut forests down to get it.

Wood is incredibly cheap in North America. We're not cutting down forests for it, either. Much of the wood used for residential construction is milled from trees grown specifically for that purpose.

Lumber is quite a bit lower quality than it used to be, because we're no longer using old-growth timber. Less dense wood burns faster, as does the laminated strand board that long ago replaced plywood (unless you're really fancy) (and toxic fire retardant treatments be damned).

The low cost of lumber is one of many things in America that don't make sense economically, but that persist because of momentum, with each generation receiving an inferior facsimile of what the previous ones knew. See also: car-centric policy (from infrastructure to gas prices) and retirement planning (pensions to IRAs to nothing).

Re: Is the world becoming uninsurable?

#653

Post by jamroom »

Retric wrote: post #618
alistairSH wrote: post #576

Earlier quoted context omitted.

How are you making this claim? Every time a hurricane hits Florida, there are photos of entire neighborhoods devastated by wind and storm surge. How many people were permanently displaced by Katrine? Etc. Maybe many of the homes weren't technically "destroyed", but each storm brings millions or billions in damage.

Hurricanes are common. The general case is they hit hundreds or thousands of square miles and destroy none or at worst a tiny fraction of the homes they hit. Take Katrina from my friends and family living in New Orleans, you’ll find city streets where none of the houses go significantly damaged. They lost power long enough you don’t want to open the fridge, but most of the city was fine in the hardest hit city from o…

Over 200,000 homes were damaged or destroyed in Katrina:

https://en.wikipedia.org/wiki/Reconstruction_of_New_Orleans

Not sure how that is a "tiny fraction" of homes. $125 billion in damage (2005).

Re: Is the world becoming uninsurable?

#654

Post by inferiorhuman »

gruez wrote: post #555
inferiorhuman wrote: post #291

Earlier quoted context omitted.

When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs they just don’t believe it. Or they see that as a cute bit of misdirection. Profits are capped as a percentage of healthcare costs, sure. Healthcare costs are not capped. Drive up the cost of care, drive up the profits. You ever think it's curious that for-profit insurance companies pay out 2–3x…

> Or they see that as a cute bit of misdirection. Profits are capped as a percentage of healthcare costs, sure. [...] You know what else is "a cute bit of misdirection"? Mentioning that profits are capped without mentioning why it's that way in the first place. >You ever think it's curious that for-profit insurance companies pay out 2–3x what Medicare does for the same procedures? ...because the government low-balls…

  ...because the government low-balls healthcare providers?
And yet Medicare is widely accepted. Go figure.

Re: Is the world becoming uninsurable?

#655

Post by njovin »

pc86 wrote: post #645
jobs_throwaway wrote: post #603

> the entire idea of being an "insurer of last resort" is based on an unlimited supply of money to fund losses that no longer make financial sense Key insight here. Insurer of last resort == bag-holder for negative EV proposition.

Insurer of last resort == taxpayers bailing out people who can no longer afford to live in their multi-million dollar properties but refuse to sell and move.

TBF the best example of a program like this that currently exists is the National Flood Insurance Program which covers many sub-multi-million dollar homes and is billions of dollars in the hole.

Re: Is the world becoming uninsurable?

#656

Post by teeray »

trollbridge wrote: post #611
teeray wrote: post #605

The problem is that in American home-buying, insurance is often compulsory for a purchase with a mortgage. This makes sense from the bank's perspective--they want to insure their collateral. However, the system doesn't really have an answer for "what happens when their collateral becomes uninsurable?" Even though lenders have force-placed insurance, even those insurers can deny coverage in certain circumstances (e.g.…

If a property is uninsurable, it can be bought for cash. The actual land value can still be mortgaged, too. Would you want to hold collateral that has a high risk of becoming worthless? You would effectively be self insuring it and would have to price that into a loan you offered.

> Would you want to hold collateral that has a high risk of becoming worthless?

Of course not, the problem is that all parties were a-okay with the purchase in the first place, and the banks are trying to change the terms when they realize their hand is a losing one after many turns of the game. Sometimes that’s life, and the corporations should be forced to lose instead of changing the rules so the homeowner loses instead.

Re: Is the world becoming uninsurable?

#657

Post by echelon »

horsawlarway wrote: post #551
chillfox wrote: post #525

Earlier quoted context omitted.

It’s possible that solve the hurricane problems with proper building regulations and lower the risk of huge wildfires with controlled burning. But the US as always prefers to pretend that there’s nothing to be done when other parts of the world has figured it out. We have cyclones here similar to the hurricanes in the US and usually it just blows over some trees maybe causes a power outage. The absolute worst I have…

Hurricanes are mostly just flood damage in the US, and some wind/debris damage exactly like the blown over trees you mention. Houses generally aren't destroyed by hurricanes in the sense of "the storm literally ripped them up", they're made uninhabitable by storm surges (flood). The scary ones are tornados. And tornados do genuinely fuck shit up. Even in those "enlightened" parts of the world you think have proper bu…

The 2024 hurricane season damage totaled $128.072 billion.

I couldn't find data for tornadoes in aggregate, only individual storms.

> Economically, tornadoes cause about a tenth as much damage per year, on average, as hurricanes. Hurricanes tend to cause much more overall destruction than tornadoes because of their much larger size, longer duration and their greater variety of ways to damage property. The destructive core in hurricanes can be tens of miles across, last many hours and damage structures through storm surge and rainfall-caused flooding, as well as from wind. Tornadoes, in contrast, tend to be a few hundred yards in diameter, last for minutes and primarily cause damage from their extreme winds

https://www.americangeosciences.org/critical-issues/faq/how-...

Re: Is the world becoming uninsurable?

#658

Post by marcosdumay »

throw0101a wrote: post #86
michpoch wrote: post #49

Earlier quoted context omitted.

> You can build out of concrete and use fire resistant materials like metal or tile for the roof and your house is nearly fireproof Just like exactly the rest of the world? We, the non-USA folks, are looking yearly at either fires or hurricanes destroying these wooden houses there and people keep rebuilding them. Insanity.

> We, the non-USA folks, are looking yearly at either fires or hurricanes destroying these wooden houses there and people keep rebuilding them. You can build wood framed (2x4, 2x6) buildings that are resistant to fire: * https://www.youtube.com/watch?v=yZe-TlYxm9g A stucco, brick, or fibre cement siding, have 2m/6' clear around the base of your house, tempered windows, and either a metal roof or shingles with a Class…

Place a piece of wood inside the hot environment of a fire and it will burn down releasing more heat than it absorbs, adding to the fire. It doesn't matter what stuff you add to it.

You can make wood not burn on the kind of environment where it would be the only or main object releasing heat. That is still a completely different category from non-flammable materials.

Re: Is the world becoming uninsurable?

#660

Post by electrondood »

gibsonf1 wrote: post #650
vantassell wrote: post #636

Earlier quoted context omitted.

You’re a fire management expert? What did LA do wrong?

1. Santa Ynez Reservoir right above Palisades was empty for the past year, depriving fire hydrants of water. (State incompetence) 2. La City defunded fire department removing 100 fire trucks from service due to maintenance. (City Incompetence) 3 Severe fire warnings reported days in advance of the fire. Rather than take precautions and position fire trucks and equipment etc as was done in the past, the Mayor flew off…

re: point #1, the fire command team captain himself refuted this disinformation in an interview with Musk.

I don't know about the other three offhand, but it's absurd to claim that state and local governments in California are somehow not taking fire risk seriously. Do you seriously think that the state that has annual wildfire season just happens to be "incompetent" when it comes to preparing for wildfires?

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