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Is the world becoming uninsurable?

charleshughsmith.substack.com

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Re: Is the world becoming uninsurable?

#701

Post by tigen »

wrfrmers wrote: post #635
crawftv wrote: post #596

Earlier quoted context omitted.

This was the whole issue. California made it illegal for insurance companies to raise rates, so the insurance companies stop renewals. Leaving everybody uninsured. Homeowners couldn't buy insurance at any price.

Public insurance. For housing, healthcare, maybe even cars (since the coprorate political complex insists that we HAVE to drive everywhere). At some point, we have to accept that the middlemen are siphoning value, not providing any. Vanguard it and let elected admins set the codes.

Isn't this thing going to be subsidized by taxpayers in the end anyway?

California already a dumb communal insurance thing, the "California FAIR Plan" for people who can't get insurance due to high risk. They force insurance companies who operate in the state to fund it. So basically everyone has to subsidize the high-risk people... but then the insurance companies leave.

https://www.cbsnews.com/sanfrancisco/news/california-fair-pl...

Re: Is the world becoming uninsurable?

#702

Post by infecto »

michaelt wrote: post #557
infecto wrote: post #467

Earlier quoted context omitted.

Honest question. Why when people describe wood framed homes do they always phrase it like houses made from "firewood", "sticks", "twigs" etc? It at least for me always detracts from the argument at hand. You could just as easily build a wood framed home with an exterior shell that is fire resistant using modern materials or brick.

Well, we are commenting on an article specifically about the spread of fire in urban areas, as we've seen in LA this week. Here in the seismically stable UK, we had problems with fire spreading in urban areas [1] in 1666. So we banned wood exteriors on buildings. It works pretty well if you don't need to worry about earthquakes or hurricanes; brick doesn't burn. This lesson is taught in history classes to 10 year old…

Less about the question (that has been asked so much now its tiring) but more on how when people do ask it, they always ask in such a negative way. Its not why are so many homes built out of timber/wood but rather why are they built out of sticks?

Re: Is the world becoming uninsurable?

#703

Post by gibsonf1 »

doug_durham wrote: post #678
gibsonf1 wrote: post #650

Earlier quoted context omitted.

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…

This is nonsense disinformation. Citations? This wasn't a forest fire so forest management isn't an issue. California makes massive investments in wild lands maintenance. It hasn't "stopped". Also most forest land in California is Federally owned. Perhaps our incoming president will invest some money in maintaining the peoples forests. This disaster deserves better responses.

I'm not sure what you mean about forests not involved: "The fire was first reported at about 10:30 a.m. PST on January 7, 2025, covering around 10 acres (4.0 ha) of the mountains north of Pacific Palisades" [1] California spending money has nothing to do with the outcomes in reality.

[1] https://en.wikipedia.org/wiki/Palisades_Fire

Re: Is the world becoming uninsurable?

#704

Post by tim333 »

giorgioz wrote: post #461

It seems everyone is on the same "We will find new solutions to a new problem". I totally agree. Here is a list of all new solutions we need: 1) not insure places at higher risk 2) mass desalinification 3) fix US hot climate grids sparkles and/or place them underground 4) Street corridors to isolate fires in neighborhood 5) Build with more fire-resistant materials 6) Install automated hydrant towers with cameras able…

>"We will find new solutions to a new problem"

Fire risk isn't that new. London famously largely burnt down in the great fire of 1666 and the solution was to build stuff that doesn't burn as easily. It's not really a new science.

Re: Is the world becoming uninsurable?

#705

Post by gibsonf1 »

electrondood wrote: post #660
gibsonf1 wrote: post #650

Earlier quoted context omitted.

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?

How does the statement of "not taking fire risk seriously" explain the fact that the Santa Ynez Reservoir was and still is empty, and is a primary uphill source of water for those fire hydrants, or that the mayor defunded the fire department and left for Ghana after getting extreme fire danger warnings?[1]

Because Santa Ynez was empty (for the past year), water was supplied from downhill water sources and the pressure needed dropped off to the point there was no longer any water out of the hydrants.

[1] https://www.google.com/maps/place/Pacific+Palisades,+Los+Ang...

Re: Is the world becoming uninsurable?

#706

Post by harimau777 »

HacklesRaised wrote: post #343
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.

To be fair we are talking about an area of the country that is prone to seismic activity, it does limit the building materials. Perhaps what should be more commonly accepted is that the US is a land of great natural beauty! And large tracts of it should be left to nature. What's the average monthly leccy bill in Phoenix during the summer? $400? Where does LA get most of its water? Local sources? I don't think that's…

What's the alternative? It's not particularly viable to just relocate an entire city.

Then there's the question of where to move them to. Between wildfires, hurricanes, and earthquakes you've eliminated most of the coasts. Much of the rest of the country defines its identity to a significant degree as being opposed to cosmopolitan cities. That doesn't leave a lot of places to move to even if we could just move the cities.

Re: Is the world becoming uninsurable?

#707

Post by [deleted] »

trescenzi wrote: post #92
redwall_hp wrote: post #63

Earlier quoted context omitted.

Another example: Japan has many quakes per year and has a strangely high percentage of the world's active volcanos. People have lived there for a very long time, built to accommodate it (both traditionally, using timber and expecting to rebuild often, or with modern earthquake-hardened architecture), and is now a top five economy by GDP. And, well, most of the US is just a hanger-on to California's economy.

> In 2023, California's gross domestic product (GDP) was about $3.9 trillion, comprising 14% of national GDP ($27.7 trillion). Texas and New York are the next largest state economies, at 9% and 8%, respectively.[1] CA is a huge economy but by no means is the US just CA + 49 other states. Might be fairer to say it’s CA+NY+TX+FL but at that point you’re just aggregating the population. [1]: https://www.ppic.org/publica…

[deleted]

Re: Is the world becoming uninsurable?

#708

Post by frinxor »

bytwhytyte wrote: post #677
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…

Let's not forget insurance company greed. They are traded on the stock market and must provide returns to their investors. Let's not pretend they are not also part of the problem. Same with health insurance, it should never be for-profit, IMHO. But I do agree they should be able to set the premiums, otherwise they just go bankrupt. People should not live in idiotically constructed neighborhoods in danger zones if the…

Insurance companies are for profit. They run the analysis of how much they need to charge to break even, and aim to charge above that. If they charge too high, customers will look at the alternatives and switch to a competitor.

You can replace "insurance" with any other business, the whole of capitalism is built upon this. Every stock on the stock market is trying to "provide returns to their investors" - each one is as guilty as the next - theres nothing special about insurance companies.

If the argument is that insurance should be a federally provided service, then we must have a different conversation. Look at the FAIR plan. They are government created, and will get wiped out because of these fires, possibly because they weren't charging enough to begin with (and taxpayers will now need to bail them out). The math doesn't change whether its state backed or privately backed. If a home, on average, gets burned down every X years, then the insurance premium needs to be adjusted to be able to cover that.

And here is the crux of the problem - if you take away the free market aspect of being able to adjust prices, and get forced to sell a product/service for less than what you need to, there will be a loss somewhere, in this order of operations:

1. loss at the insurance company --> insurance company goes broke or leaves the state

2. loss at the FAIR plan --> FAIR plan reserves get wiped out

3. loss at the state level --> taxpayers need to bail the situation out.

Id argue that letting the free market work (at layer 1 above) is the proper way about it. If a house burns down every 10 years, let insurance charge 10% of that cost, because that is the actual risk involved in the system. House prices will naturally come down to reflect that reality of risk.

Re: Is the world becoming uninsurable?

#709

Post by amanaplanacanal »

njovin wrote: post #646
HacklesRaised wrote: post #343

Earlier quoted context omitted.

To be fair we are talking about an area of the country that is prone to seismic activity, it does limit the building materials. Perhaps what should be more commonly accepted is that the US is a land of great natural beauty! And large tracts of it should be left to nature. What's the average monthly leccy bill in Phoenix during the summer? $400? Where does LA get most of its water? Local sources? I don't think that's…

There's plenty of water for Californians in California + The Colorado River. The problem is that our government has spent ~100 years ensuring that corporations have easier and cheaper access to it so that they can grow feed for farm animals to sell overseas , largely to places like UAE that have sufficiently depleted their own water table as to make it impossible to grow alfalfa, thus worsening the risk of droughts f…

I won't disagree with you, but it's a big change.

When European descendants started colonizing that part of the world they treated all the resources as free for the taking. You went into nature, developed some land for agriculture, and it became yours by right. The same with the water. It was essentially homesteading.

So water was treated as property the same way the land was. Whoever used it first, owned it. Leaving out the natives because apparently nobody cared about them, it made sense.

How we fix it now within that legal framework is the question.

Re: Is the world becoming uninsurable?

#710

Post by s1artibartfast »

_3u10 wrote: post #181
s1artibartfast wrote: post #6

Earlier quoted context omitted.

There are to components, breakeven price for profitability and the price that an or will be paid. If it costs 10 million dollars to replace a house, the insurance will be out reach for most homeowners.

My understanding is that some people are willing to pay, but it's illegal to charge that much.

There is an issue with price caps in some regions. Some of those have been addressed.

I think this is a subset of larger shift in the economics of insurance. While coverage focuses most on the climate change aspect, the majority of the change is driven by building costs. If you cant rebuild economically, then you cant insure economically.

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