American Homeowners Are One Disaster Away from Losing Everything

shaftway 4 hours ago | parent | next [-]

I'm insured, but I'm considering dropping insurance for the most likely disaster: earthquakes.

I'm in CA, and even though I'm not on top of an active fault, I'm close enough to be impacted. When the big one gets here, if it's big enough to affect me, then everyone else will be affected. I don't have any reason to expect them to stay solvent if a third of the CA population files for benefits.

I've thought about taking the money I pay for earthquake insurance premiums, and instead putting it on polymarket, betting that an earthquake will happen. If it doesn't, then I'm no worse off than I was paying for insurance. If it does, then polymarket just distributes my "winnings".

Convince me to keep my insurance.

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Manuel_D 2 hours ago | parent | next [-]

The most convincing argument I could make is that the government could step in and keep the insurance agencies solvent. Sort of a too-big-to-fail situation.

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CobaltFire 4 hours ago | parent | prev | next [-]

I won't try because I did something similar. If it happens I can guarantee that the insurance companies won't be solvent.

Instead we are focused on investing our money as a form of self-insurance.

It's kind of like life insurance; term makes sense but whole life doesn't (vs investing the premiums).

As far as polymarket: I can't say there. I've never used it (though I know what it is).

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kbelder 3 hours ago | parent | prev [-]

The issue isn't the big one. The issue is a minor tremor that happens to crack a vital support beam, or cracks a pipe, and causes $25k of damage.

	▲	ternaryoperator 3 hours ago \| parent [-]
		Alas, not. Most policies in California have a 15% deductible. That’s 15% of the insured value of your home. So for nearly all houses, a $25K bill is not covered. California policies are and have always been to cover catastrophic damage.

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GianFabien 2 hours ago | parent | prev | next [-]

It would be more useful to determine why insurance premiums are rising faster than almost every other homeowner expense. At the same time noting that insurance companies are making massive profits and squandering millions on executive salaries and advertising.

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AFF87 5 hours ago | parent | prev [-]

>The homeowners most exposed to climate-driven disasters are, in many cases, the same ones least likely to have insurance when those disasters arrive.

I wondered whether this is a signal that the insurers don't want to insure for those risks and unsurprisingly there is a Wikipedia page for it! [1]

[1] https://en.wikipedia.org/wiki/Climate_change_and_insurance_i...

	▲	cucumber3732842 2 hours ago \| parent \| next [-]
		You have to have insurance if you want a mortgage so not having insurance is basically just a proxy for (mostly old) people who own their house outright. I would carry a $50k deductible if I could. No insurer I've encountered would let me. I don't really care to insure against anything other than a total loss.
	▲	engineer_22 4 hours ago \| parent \| prev [-]
		Related: https://en.wikipedia.org/wiki/Moral_hazard