This is silly, and overcomplicating the issue. The world is very insurable, at a price. The property and casualty business is competitive as hell in almost all parts.

The government needs to just stay out of it.

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thrance a year ago | parent | next [-]

When the cost of premium surpasses what people are able to pay, companies will just leave. That's the point of the article, you can only ignore material reality for so long.

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danielmarkbruce a year ago | parent [-]

The companies are leaving because of mandated price caps from the government. In every other market when cost > price and they can't control cost, companies increase price.

You can only ignore the reality of government interference in the insurance market for so long.

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thrance a year ago | parent [-]

I meant that at some point, with ever more costly and numerous disasters, the premium insurance companies would have to charge to be able to properly insure their clients would be too much for said clients to stomach, which would prevent anyone from getting anything insured. This has nothing to do with government interference. At some point the equation simply doesn't work anymore.

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danielmarkbruce a year ago | parent [-]

It still won't cause that. People will own less expensive things if the all in cost of owning them goes up. This is econ 101. People buy cheaper houses when interest rates go up and vice versa.

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RevEng a year ago | parent [-]

Tell that to people who can't even afford rent. Some goods are inelastic because people need them at any price. Housing prices are good example of that. This is also econ 101.

	▲	danielmarkbruce a year ago \| parent [-]
		Take econ 101 again. "some goods are inelastic" isn't even a coherent sentence. You are out of your depth.

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csours a year ago | parent | prev [-]

Ok, just play the next move. Insurance is expensive. Now what happens.

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danielmarkbruce a year ago | parent | next [-]

Can't think for yourself? This is econ 101. People will try to drive down the cost by:

1) Buying/building smaller houses that cost less to insure. 2) Building using different materials which are less prone to burn. 3) Moving to areas less prone to fires/hurricanes etc 4) Voting for representatives who take this more seriously and install better infrastructure to fight fires/floods.

These are all good ideas which haven't been put in place already because the government has distorted the insurance market so badly people aren't getting the right price signals.

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csours a year ago | parent [-]

> "The government needs to just stay out of it."

0) Elect people who claim they can make the voters' existing lifestyle affordable.

I agree that sometimes nothing or not very much is the best thing for the government to do, but a crisis is a very bad time to say that, because the other side will just claim they will fix things.

After all, deflation is not good, but claiming that you will bring down grocery prices does seem effective.

	▲	danielmarkbruce a year ago \| parent [-]
		Sure - "politics is a tough game" is absolutely true.

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lionkor a year ago | parent | prev [-]

People don't build wood houses in an area that gets wild fires

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jopsen a year ago | parent [-]

Probably they will, at one point maybe that banks wills stop financing it.

But only when you can't get mortgages, people will begin to stop, and even then some will continue.

It'll take a long time for these changes to trickle out. Especially, when real estate prices in LA are so high.

It might be faster to fix this with zoning. Or if the area is so desirable, find a way to engineer your way out of it.

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danielmarkbruce a year ago | parent [-]

We don't want fast fixes. Things change, building materials could change, fire fighting methods could improve etc. If we can send the right signal via the right price for the risk, people can react accordingly to either reduce or avoid the problem.

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jopsen a year ago | parent [-]

> people can react accordingly to either reduce or avoid the problem.

Yes, but lots of people won't be consider all factors when buying a house.

Prices are high, houses aren't on the market long, when you do find a house that matches your criteria, are you going to consider if it's safe from floods, fires, earth quakes, etc?

You're already factoring in schools, distance to work, shopping options, etc.

Not to mention the fact that you're mostly worried about whether the house has mold, termites, pest, or construction deflects, how long time to the roofing need to be replaced.

Asking normal people to factor in natural disaster probabilities is difficult.

Maybe, it's better to not allow construction is such places through zoning.

I bet most home buyers spend more time looking for pests, mold, leaky pipes, etc, than they do investigating wild fire risks.

	▲	danielmarkbruce a year ago \| parent [-]
		Home buyers don't need to investigate wild fire risk - the need to check the price of insurance in the area (assuming it's priced without distortions). If the insurance looks insanely expensive, people can either walk away, accept it, or look into how to change it. Basically you are saying "i want a nanny state".