Immediate deaths. How many suicides happened after the fact as an indirect cause?

This is not a good analogy.

Crumple zones in cars exist under the assumption that they will not be occupied by humans. In a house, on the other hand, any place could have a person inside of it during an earthquake, meaning that basically the entire house would need to stand to avoid any human being hurt.

Nice point. Still, in wast majority of cases, house keeps standing -> habitant survival chance goes up.

Cars being on the move, makes that distinction much much more relevant

Where is the crumple zone in the burned out buildings in California?

Not true. In the 2023 earthquake in Turkey 10s of thousands of apartment buildings collapsed. Official death toll is 60k or so but it's widely known that the actual number is at least twice that.

https://en.m.wikipedia.org/wiki/2023_Turkey%E2%80%93Syria_ea...

But this cuts both ways. The insurers chose to provide their services in the area for the amount of money agreed upon. If anyone was more aware of the risks and probabilities, it's them.

Why do they get to pull out now when it's time to hold their end of the contract?

Please do let me know where I can live that is guaranteed to be safe from unexpected natural disaster.

> it's pretty clear that a purely market-based health system costs lives.

That was literally the take about insurance. And here we are, again.

> It's obvious to every socialist that this move was stupid

Is it? Or is this post hoc rationalization? I really dislike playing the “both sides” card, even for a moment, but it’s hard to deny that there are questionable takes on both ends.

I agree with you that not every regulation equates to socialism, and it’s ridiculous to claim it is. However, the narrative of “insurance companies bad” is incredibly prevalent among left-leaning perspectives, and any regulation around insurance premiums tends to be automatically celebrated as a clear victory.

Ironically (because it's a free market argument), it’s a not-uncommon argument that if insurance companies can’t provide their services for no more than some arbitrarily-decided amount annually, they’re being inefficient or greedy and should go bankrupt and let a new competitor take the market.

Pretty much, yeah: https://en.wikipedia.org/wiki/Socialism

The real problem is the FIRE. The houses could be made fire-resistant, but making houses to be fire-resistant is going to be more expensive than managing the forests to reduce wildfires and storing more water. I don't believe that a tiny screen is going to make this huge difference you think it is. These fires are HOT and don't just catch houses on fire with little embers. They are hot enough to set wood and plastic on fire from a pretty good distance away. Green trees don't easily burn because of their high water content. Trees have evolved to survive fires as well.

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).

While having above ground power lines

While having unmanaged accumulated flammable brush

While having an empty reservoir under repair

While having the public water source unable to maintain water pressure for multiple hydrant usage

While having too few fire fighters dispatched in the area anyway

While having houses made out of wood

is it an ignorant take when the houses not made out of wood with their own watersource were able to withstand 100mph wind gusts and firestorm? it really really makes everyone else look ignorant

Frankly, everyone has been warning about the risk for years. The fire started as a forest fire (whether it was arson or not), and was anticipated by insurance companies who dropped policies on thousands of people in the months leading up to this. The winds are a big problem of course, but if there were not so many acres of kindling around the city along with insufficient water reservoirs, then a fire like this could not spread as easily as it did. I will give you that the fire could have still happened and been bad either way, but insurance people who literally study this stuff for a living and have skin in the game knew it was likely to get out of control well in advance.

> 128 billion dollars is equivalent to 200,000 homes, or even more, which does not represent total obliteration,

As of 2023, FL has over 10.4 million homes.

> however, if that level of devastation happened in the UK, the only comparison would be what the Luftwaffe did during WW2.

If you are referring to The Blitz, the numbers I have access to is that over 1.1 million homes and flats were destroyed in London alone.

What if Paul built his house somewhere less flammable? I see options here where Peter doesn't need to be robbed, he could pay a fair rate and Paul could make less risky decisions.

If one pool of people are taking a bad deal vs the market rate when buying insurance then it isn't really insurance any more. It is a transfer payment a.k.a. welfare. Which is cool and all in the sense that welfare is a social tool that exists. But calling it 'insurance' is needlessly polluting the language. If people expect to hoover money off others then they should be charged more until the expected return of everyone in the insured pool is equal. If the payouts are going to be held equal in the event of a disaster then that means the price of insurance has to vary depending on the risk profile of the customers.

> If you have 10,000 customers in Los Angeles, and 5 million elsewhere, you can either isolate the LA customers and charge them the "real" price

That's the only way.

> which will be unviable as a business and probably politically touchy too

Why would it be? If you live in Los Angeles - doesn't mean you don't need insurance (even if it several times the cost of insurance in the safer areas).

> or you can include them in the broad pool

No, you can't. Your competitor who doesn't do this will offer cheaper insurance - because they doesn't distribute high risk of small group to everybody else.

> the people with a full-cinderblock home in a non-flammable state pay $20 more a year so the entire endeavour can work.

Why would they do that? 20 bucks is 20 bucks.

> The concept probably works better if you have some concept of social cohesion to lean on

You mean if you with totalitarian governance deprive people of the ability to choose? Yeah, that could work. I mean, that's how the gulags were justified.

Except if insurance company A does that, insurance company B will call the full-cinderblock home and say "hey, we can save you $20".

If it's a product you actually want everyone to carry (like health insurance) it should probably be the government offering it.

you can either isolate the LA customers and charge them the "real" price of the risk, which will be unviable as a business

NOT lining up the premium with the actual risk is what's non-viable.

> or you can include them in the broad pool, and the people with a full-cinderblock home in a non-flammable state pay $20 more a year so the entire endeavour can work

And you immediately start loosing customers to insurers that either did the former or left LA alltogether. This changes $20 surcharge into $25 surcharge, causing more customers to leave, causing surcharge to increase and so on.

> I always found it funny when insurance marketing talks about "personalized rates", when the goal is to DE-PERSONALIZE the risk.

Actuarial science is not often associated with “fun” but they have been partying for centuries.

“In 1662, a London draper named John Graunt showed that there were predictable patterns of longevity and death in a defined group, or cohort, of people, despite the uncertainty about the future longevity or mortality of any one individual. This study became the basis for the original life table. Combining this idea with that of compound interest and annuity valuation, it became possible to set up an insurance scheme to provide life insurance or pensions for a group of people, and to calculate with some degree of accuracy each member's necessary contributions to a common fund, assuming a fixed rate of interest.”

> you can either isolate the LA customers and charge them the "real" price of the risk […] or you can include them in the broad pool

Maybe you don’t understand that the insurance business is based on including everyone in one pool (so it can swallow a large clustered crisis more easily) AND charge them (more than) the real price of the risk.

This completely ignores incentives. If insurance isn't allowed to charge people more who live in fireprone or floodprone areas, more people will live in such areas, and overall society will have to spend more money rebuilding when disasters inevitably hit those areas. Personalised insurance pricing would allow insurers to charge much more to people living in such areas, which incentivises people not to live there. It's also a moral issue: if everyone pays the same rate, then people who did the right thing and chose to live in an area that wasn't fire or flood prone are subsidising people who did the risky thing.

By eliminating personalization you’re doing the same thing - removing price as a signal.

It’s good when insurers personalize! Install screens to prevents embers from entering roof vents? Great. You should get a discount!

It’s a win-win. Consumers are incentivized to take measures to reduce risk.

> This sounds like a very US-centric view

> My answer: The selective approach of insurance companies mirrors the profit seeking lack of solidarity, which is ultimately incompatible with the risk pooling purpose

What’s the non-US-centric view? Lloyd's of London is older than the US.

profit motive does keep the economy going. if you do not believe that youre like a flat earther.

What are you trying to say here?

"good enough" assumes a lot about the rules of the game here. Imagine, the game is: "heads I win, tails you lose" and then read your comment.

Or, the market lets the gods do their work, rather than the government acting like one.

—esoteric capitalism

You are right that you can get away with it in NZ.

For total loss then bankruptcy might save you money (assuming you have no other assets or kiwisaver; since you still owe the debt).

But part of the contract with the bank is allowing the bank and insurance company to verify/update.

If you cancel your insurance, the insurance company is incentivised to tell the bank since you will probably sign up for insurance again when told to by the bank. I don't believe the banks or insurance have push updates. I would guess banks batch check if insurance is still live annually?

I live in Christchurch and I believe insurance is valuable risk management - plenty of people gambled and lost with Earthquakes. That said: I own an as-is house because I bought a 3 bedroom on 800m2 for $190000 (cheap because you can't get a mortgage for it because it is uninsurable due to subsidence - I only paid land price).

Banks in Australia were the same, but some are now starting to demand proof of insurance yearly to counter that loophole.

You can do that in the US too. As well the banks won't like it, so what they'll do is protect their assets with force-placed insurance that you pay a hefty premium for.

A quick google suggests a similar situation in that there's no legal mandate but most lenders in NZ require insurance.

For the first year I had a policy similar to what farmers use for ag land, then it got cancelled and I was uninsured, which wasn’t ideal.

I sold the house after a while, it was an interesting experiment in cheap living but ultimately it wasn’t great.

Annoyingly I couldn’t insure it because it was thatched, and I couldn’t change the roof because of heritage. The Irish government has screwed over thatch owners brutally.

Ah, fair point

I kinda figured it was self-destructive arson (detected or undetected) or gross negligence, and I'm mostly paying for those.

Similar to when I look at causes of death for my age group and can pretty much eliminate the top 2 of 3 causes for myself.

I would actually guess that biggest risk is internal. Either faulty wiring, appliance or simple user error in kitchen or with live fire. Entire neighbourhoods burning in general is rare event.