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| ▲ | JumpCrisscross 10 hours ago | parent | next [-] | | > Public insurance. For housing This is California’s FAIR plan [1]. It’s a wealth transfer from non-homeowners to homeowners, homeowners in low-risk areas to high-risk homeowners, and from low-value homeowners to rich ones. [1] https://en.m.wikipedia.org/wiki/California_FAIR_Plan | | |
| ▲ | wrfrmers 6 hours ago | parent [-] | | 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. | | |
| ▲ | JumpCrisscross 2 hours ago | parent [-] | | > draw funds by taxing homeowners, specifically, and limiting payouts by fire risk, capping at a mean replacement cost, not per-house This almost seems designed to maximise fury. You're still taxing low-risk homeowners to pay for high-risk damages. And when a catastrophe hits, you aren't paying enough to rebuild (or avoid bankruptcy, in which case you're just routing taxpayer funds to creditors). Add to that you've branded it a tax increase it's almost something the GOP would run as a false flag against a Democrat. |
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| ▲ | tigen 12 hours ago | parent | prev | next [-] | | 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... | | |
| ▲ | trilobyte 11 hours ago | parent [-] | | 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. | | |
| ▲ | onlypassingthru 10 hours ago | parent [-] | | The building codes will need to reflect the new normal. Defensible perimeters, metal roofs and masonry or cementitious exteriors are a must for many areas going forward. Log cabins amongst the pines just aren't tenable in the West any more. | | |
| ▲ | Syonyk 8 hours ago | parent | next [-] | | You say that... but a well built log cabin, with a Class A fire resistant roof, is rather likely to survive a wildfire unbothered if the ground a couple feet around it is kept cleared. They're simple (not a lot of corners for burning things to wedge in), they tend very well sealed with smaller windows (so less chance of a window breaking and allowing embers in), and the amount of thermal energy it takes to light a full log on fire is quite high. Radiant heat from a forest fire isn't going to bother a log cabin. It might darken the wood somewhat, but it won't light smooth logs on fire. Even random firebrands and such lack the energy to bother wood. The only concern would be a shake roof - that would catch fire easily and burn the place down. But a well built and "tight" roof (no massive eaves with vents into an attic, just minimal overhangs) of Class A fire resistance would work just fine. Metal roofing is not inherently fire resistant, either - it depends on the materials, and what's below it. Some metal roofing can transfer enough heat to the wood below to light that on fire, even without direct flame spread. And, non-intuitively, a lot of asphalt shingles are Class A fire resistant when properly installed. What doesn't work well, obviously, are the sort of expensive homes with "all the architectural features," lots of inside corners that trap debris, and an incredibly complex roofline. | | |
| ▲ | bombcar 6 hours ago | parent [-] | | People forget that you don't have to modify a McMansion to whatever requirements you're adding - you can build something entirely different. "Earthships" or other hobbit-hole like houses are almost completely fireproof as long as the entries are handled correctly - anything that can start a fire through three feet of earth is probably a volcano anyway. |
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| ▲ | pclmulqdq 8 hours ago | parent | prev | next [-] | | A "log cabin amongst the pines" with a decent sized "yard" clearance area, a good roof, and where the sides of the house are kept reasonably moist is pretty much fireproof. | |
| ▲ | datavirtue 5 hours ago | parent | prev [-] | | Highly suggest clay tile roofs. They last a hell of a lot longer than metal roofs, which have several of their own problems. |
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| ▲ | ben_w 13 hours ago | parent | prev | next [-] | | As a British citizen by birth, I'm amused by the idea that Americans may get National Insurance for houses before they do for healthcare. | | |
| ▲ | pclmulqdq 12 hours ago | parent | next [-] | | 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. | |
| ▲ | kube-system 9 hours ago | parent | prev | next [-] | | 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 | |
| ▲ | Alive-in-2025 12 hours ago | parent | prev | next [-] | | 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. | |
| ▲ | bdndndndbve 12 hours ago | parent | prev [-] | | [flagged] | | |
| ▲ | rs999gti 10 hours ago | parent [-] | | > but if you have a house to insure you're worth protecting. American home owners pay property taxes, any politician would not want to kill this income source off. |
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| ▲ | woah 10 hours ago | parent | prev | next [-] | | Public insurance would provide no benefit. The issue in California is that people have built their houses in dangerous areas and have not taken any measures to reduce fire risk. The state has already set limits to how much insurance costs can be increased (from a past generation of economic illiterates who wanted to stop "middlemen siphoning value"). Therefore, insurance companies are just pulling out, which disproves the entire idea that they are "siphoning value", since obviously there is no value there to siphon. The only thing that public insurance would do is to provide a way for the state to incur another massive unfunded liability. Except, unlike healthcare or pensions which have the somewhat laudable goal of taking care of poor people and old people, this would go to bailing out rich homeowners who made a bad investment of a house in a flammable area and then refused to spend money on fire safety measures, either in their home or their municipality. Of course these fire zone bag holders are now clamoring for the state to take on their bad investments by pushing conspiracy theories about the evil insurance companies. | | |
| ▲ | bombcar 6 hours ago | parent [-] | | 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. |
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| ▲ | rs999gti 10 hours ago | parent | prev | next [-] | | > Public insurance. That only guarantees you have insurance. It does not guarantee that you will be covered or made whole in an incident or emergency. See FL Citizen's insurance and other insurances of last resort as examples. What really needs to happen is premiums go up with the cost of risk. But this also means pricing people out of homes, vehicles, businesses, etc. And no politician will allow this. | | |
| ▲ | Aeolun 9 hours ago | parent [-] | | Only pricing them out of unsafe homes/cars etc. I feel like that is probably a good thing. |
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| ▲ | hallway_monitor 13 hours ago | parent | prev [-] | | It does seem like it's time to stop letting this "industry" profit off the misfortune of its customers. Making all of these a public service instead of private industry makes sense at this point. | | |
| ▲ | MajimasEyepatch 13 hours ago | parent | next [-] | | 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. | | |
| ▲ | onlypassingthru 10 hours ago | parent [-] | | Slim from a percentage of total premiums but substantial when looking at the absolute dollar amount of profits. It's all relative to the size of the pie. | | |
| ▲ | bruce511 9 hours ago | parent [-] | | The absolute value is only meaningful when compared to the amount of capital invested. Its also only meaningful when measured over a long period which takes good years and bad years into account. | | |
| ▲ | MajimasEyepatch 4 hours ago | parent [-] | | Also, when margins are slim, a major event (like a series of wildfires in one of the biggest cities in the US) can wipe out those profits. A responsible insurer can withstand one bad year. But if those major events start happening with more frequency, then one bad year becomes a series of bad years. Reinsurance premiums for the insurer go up, meaning that taking on risk is more expensive, and they’ll eventually have to decide between raising their own premiums to unsustainable levels or pulling out of risky markets. |
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| ▲ | bruce511 9 hours ago | parent | prev [-] | | 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. |
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