That was one (corrupt) option. Another would have been to draw funds by taxing homeowners, specifically, and limiting payouts by fire risk, capping at a mean replacement cost, not per-house. That that's not what happened is an issue with the implementation, not the base concept.

As someone who's home insurer pulled out of California and so I had to scramble to find another carrier, I looked at the FAIR plan and it is completely untenable for most people. My insurance was already high, ~$2000/year for coverage that would rebuild our house, and under FAIR it would have gone up to $12000/year.

I mostly agree with the article that insurance is grounded in statistical measures of risk and there's no point railing against it. Norms are going to have to adapt to increased risk and how we build homes and infrastructure needs to shift away from short-term, low-cost thinking to longer-term solutions with a higher-upfront cost and lower TCO given the new constraints. Things like burying power lines, aggressively managing fire danger, and homes that are built to be more sound to natural disasters have to become the status quo.

Most of these things are already possible today. In my neighborhood, PG&E did an assessment and it would cost every homeowner on the street ~$25,000 to have the power lines buried. I would have opened my wallet immediately to reduce the fire risk, but it got caught up in politics and policy. When we had some renovation on our house, my wife and I insisted on some of the work being done in ways that would make the house safer and easier to maintain over the long work. The contractor balked at first saying it would cost us an extra couple of thousand dollars. I had to point out that an extra $3000 to make sure things lasted an extra 5 - 10 years and was easier to maintain and upgrade meant nothing. But people have to insist on doing better because right now the norm is to cut corners on everything to save in many cases a negligible amount of money over the life of the work or against the cost if there is a disaster.

It does seem to be backward. In my opinion, "insurance" is strictly about compensation for loss, and should absolutely be a private transaction, while preventative and emergency systems should probably be public. Healthcare coverage, despite being called "insurance," is really a system of preventative and emergency services, while California's state-run home insurance is the former. But this is what they get for trying to have price controls.

We have plenty of national insurance programs, including for both of those... but they're not both free and universal.

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

https://en.wikipedia.org/wiki/Medicare_(United_States)

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

That's a great point. We'll get public insurance for houses only if the legalized bribery paid by existing insurance companies to block public ins. is less effectively applied than the money blocking public health insurance in the US. Old people don't care because they have medicare at 65+, while the rest of us slubs are going along with whatever we can find.

We get what we allow or deserve here in the US. Citizens United led to our current awful outcome.

[flagged]

The danger of the areas has not been properly accounted for, and now that we have a better understanding, nobody wants to pay what it actually costs (either in increased insurance, which apparently CA has limited, or building design changes - knock down the flammable one and build something impervious, or even abandoning untenable locations - perhaps after disaster, perhaps before).

Everyone's talking about fire insurance, but the earthquake insurance question is even bigger and basically untenable in a worst-case scenario. So in that case, CA wised up and the state is much more earthquake resilient than it was 30 years ago.

Only pricing them out of unsafe homes/cars etc. I feel like that is probably a good thing.

The profit margins on insurance are usually pretty slim. Insurance companies are generally not well differentiated from one another, so they have few avenues to compete other than on price. A state-run insurance plan also has to operate at a profit/surplus or else it will have to be subsidized by the taxpayers. The effect is the same either way.

Ironically they don't profit off the misfortunate customers. Those ones typically get back more than their premiums.

They profit off the fortunate customers, those who have no need to claim from insurance.

But that's not what it's said