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Insurers Are Deserting Homeowners as Climate Shocks Worsen

nytimes.com

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Re: Insurers Are Deserting Homeowners as Climate Shocks Worsen

#81

Post by toomuchtodo »

infecto wrote: post #68
iandanforth wrote: post #53

As it's only tangentially mentioned in the article people should know that in many (most?) places insurers can't raise prices commensurate with risk making "nonrenewal" their only option. These regulations have reasonable origins because as a mandated product it's pretty tempting to price gouge, but there's no exception for circumstances where the price really should be 3x the historical cost.

This is the massive failure that exists in many states. You are unable to raise rates but the risk has increased and premiums must increase. Both CA and FL are huge losers in this regard. Heavy regulation on rate increases but then happy to create underfunded state policies for their constituents.

Root cause is that wages cannot sustain climate liabilities (insurance costs) that have been incurred by decades of fossil fuel strategy. People also can't afford to move, it is costly to build new housing due to labor and material costs. Bit of a death spiral all around.

Re: Insurers Are Deserting Homeowners as Climate Shocks Worsen

#82

Post by switch007 »

jmyeet wrote: post #38

This isn't because of climate change. It's because of bad laws combined with the housing chickens coming home to roost. On the legislation front, a series of court cases and legislation combined with weak oversight meant that something like 70% of the nation's roof insurance claims were in Florida. There was clear fraud in many cases. Because of this legislation was introduced that made it difficult for any homeowner…

Totally agree. Same issues in the UK too.

House prices are a cancer on society

Re: Insurers Are Deserting Homeowners as Climate Shocks Worsen

#83

Post by ethbr1 »

toomuchtodo wrote: post #55
hatradiowigwam wrote: post #50

Earlier quoted context omitted.

Could you elaborate about the outright fraud by Freddie Mac? This is a genuine request for information.

Not OP, but GSEs are transferring unknown climate risk to investors (and potentially taxpayers if a bailout is required) by not updating their insurance guidelines around climate risk models and the mortgages they securitize for sale into the bond market. Insurance repricing or wholesale refusing to underwrite a territory is the leading indicator of stress, because they can move the fastest (versus mortgage market re…

Tagging this previous HN submission on: https://news.ycombinator.com/item?id=41664750

tl;dr - When insurers pull out, Florida creates some new insurers, rubber stamps them as financially solvent (even though they're not), these new entities insure properties, and then banks can originate new mortgages (because the properties are insurable) before rapidly transferring them to Fannie/Freddie (as they're secretly trash, but compliant). End result if properties are flooded, demolished, or burned? Insurers go bust and leave Fannie/Freddie holding the bag (the mortgage, now with no property securing it).

Re: Insurers Are Deserting Homeowners as Climate Shocks Worsen

#84

Post by mike_hearn »

mikrl wrote: post #19
idbehold wrote: post #11

The climate is changing and is affecting regions we knew would be impacted by climate change 30+ years ago. The insurance companies cannot make a profit (and thus would not choose to operate) in these areas now that they're being impacted by climate change. On one hand this seems like the market working exactly as it should be. People should've moved out of these regions in the last 30 years given the information abo…

How do you feel about the denialist argument that since people still buy expensive waterfront property, climate change is not a big deal? My interpretations would probably be some combination of - information asymmetry leading to demand distorting upward - the people who are buying the property have priced in the loss relative to their utility and will be relatively unaffected should they be left holding the watery b…

Why so uncharitable? You could at least consider the possibility that their understanding of the situation is better than yours.

There are supposedly two climate-related threats from living on the coast: sea level rise and storm risk. Sea level rise is so trivial that many Pacific islands have been getting bigger, not smaller as was predicted, and it's a very steady rate of change. That leaves storm risk. NOAA is a group of people with a long history of scientific scandals who owe much of their funding to their claims about climate risk, but let's see what they say about living on the coast:

https://www.gfdl.noaa.gov/global-warming-and-hurricanes/

> "it is premature to conclude with high confidence that human-caused increases in greenhouse gases have caused a change in past Atlantic basin hurricane activity that is outside the range of natural variability"

Mankind has been emitting CO2 for 150+ years but there's no data showing it's made the weather worse.

So, all claims that living on the coast is a bad idea are based 100% on modelling predictions. Given they've been diverging over time and divergence has got worse instead of better, the opposite of what should be happening, reasonable people can certainly conclude it's OK to ignore them when considering property prices.

Re: Insurers Are Deserting Homeowners as Climate Shocks Worsen

#85

Post by mike_hearn »

yodon wrote: post #77
tlogan wrote: post #60

The issue here has less to do with climate change itself and more to do with a combination of regulatory and economic factors. While left-leaning outlets might point to climate change as the primary cause, the reality is more nuanced—similar issues are visible in other sectors, such as health insurance. Here are a few key points to consider: - Insurance Company Consolidation: As the industry consolidates, large insur…

> The issue here has less to do with climate change itself and more to do with a combination of regulatory and economic factors. The issue is not that the insurance regulations have tightened or changed. The issue is that the climate risks have heightened and the regulations have NOT changed to match the heightened climate risks. Small increases in average temperature of the air leads to large decreases in average mo…

> The insurers have the data, that's why they are acting the way they are. Fires are more common and fires are larger.

Fires in the USA are far less common than they were 100 years ago. Here's a rendered graph of data from the US National Interagency Fire Center:

https://imgur.com/a/MZMmc06

Re: Insurers Are Deserting Homeowners as Climate Shocks Worsen

#86

Post by nojvek »

Meanwhile Desantis in Florida is spending $15M of taxpayer money to ensure books don’t say gay.

That 100 or so trans folks in prison can’t access the bathroom of their choice or get healthcare they need.

Millions spent on supposed woke war to show the Dems they are “anti-woke”.

Senator Rick Scott who was caught with pants down embezzling billions in insurance fraud was voted again.

Florida did this to themselves.

Re: Insurers Are Deserting Homeowners as Climate Shocks Worsen

#87

Post by bashmelek »

jmyeet wrote: post #38

This isn't because of climate change. It's because of bad laws combined with the housing chickens coming home to roost. On the legislation front, a series of court cases and legislation combined with weak oversight meant that something like 70% of the nation's roof insurance claims were in Florida. There was clear fraud in many cases. Because of this legislation was introduced that made it difficult for any homeowner…

I’m glad to hear mention of roofing claims finally. I live in Florida, my insurance shot up. No claims, I live away from the water. I paid for my own roof. But a lot of people around me got free roofs, and I remember getting constant calls for “free roof inspections.”

Re: Insurers Are Deserting Homeowners as Climate Shocks Worsen

#89

Post by dagw »

A_D_E_P_T wrote: post #79
dagw wrote: post #63

Earlier quoted context omitted.

I don't want to make any claims, though. I think you're missing the point of why these "overly-bureaucratic clients" are insisting on insurance. I don't want you to have insurance to keep you safe, I need you to have insurance to keep me safe. When the widget you built for me breaks and damages my customer and I end up owing them €1m, I want to be able to recoup at least some of that cost from you. It won't be you ma…

> When the widget you built for me breaks and damages my customer and I end up owing them €1m, I want to be able to recoup at least some of that cost from you. I'm not sure that follows. I build something, send it to you. You integrate it, test it, make it production-ready, and ship it. If something breaks in testing, that's pretty normal, and it would be on me to fix -- and presumably contractual agreements would pr…

it would be a matter for the courts and not a matter for insurance

The specifics of the contract is besides the point. Taking you to court is meaningless unless you also have insurance, since if you're a freelancer or small company there is no way to get any money out of you. You'll just declare bankruptcy and be on your way and we'd still be stuck with the bill, even if it was you that screwed up. You having insurance is insurance for your customers that they have some chance of recompense if you screw them in some sort of way.

Re: Insurers Are Deserting Homeowners as Climate Shocks Worsen

#90

Post by jmclnx »

aaronblohowiak wrote: post #35
jmclnx wrote: post #22

>Communities that are deemed too dangerous to insure face the risk of falling property values, which means less tax revenue Now that is the funnest quote I have seen in 2024. I would love to know what government will lower your property tax if your house value falls ? I have never seen that happen ever nor do I know anyone who has seen that happen over the past 40 years.

What state are you in? This is quite common in many parts of the country..

I do not want to ID the state, but I live above the mason-dixon line and east of PA.
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