Most active commenters

    ←back to thread

    Is the world becoming uninsurable?

    (charleshughsmith.substack.com)
    478 points spking | 11 comments | 17 Jan 25 00:32 UTC | HN request time: 0.426s | source | bottom
    Show context
    Animats ◴[17 Jan 25 04:28 UTC] No.42734092[source]▶
    Not uninsurable, but buildings are going to have to become tougher.

    It's happened before. Chicago's reaction to the Great Fire was simple - no more building wooden houses. Chicago went all brick. Still is, mostly.

    The trouble is, brick isn't earthquake resistant. Not without steel reinforcement.

    I live in a house built of cinder block filled with concrete reinforced with steel. A commercial builder built this as his personal residence in 1950. The walls look like a commercial building. The outside is just painted cinder block. Works fine, survived the 1989 earthquake without damage, low maintenance. It's not what most people want today in the US.

    replies(18): >>42734105 #>>42734140 #>>42734173 #>>42734290 #>>42734511 #>>42734544 #>>42734644 #>>42734673 #>>42734722 #>>42734995 #>>42735134 #>>42735677 #>>42736159 #>>42736211 #>>42736562 #>>42736923 #>>42741822 #>>42744129 #
    Sabinus ◴[17 Jan 25 04:31 UTC] No.42734105[source]▶
    If the market is allowed to price insurance correctly then we can motivate building designs to be more disaster resist. If the McMansion can't get insurance but disaster resistant, modest homes do, then people will adapt.
    replies(4): >>42734200 #>>42734228 #>>42735408 #>>42739700 #
    1. doctorpangloss ◴[17 Jan 25 04:54 UTC] No.42734228[source]▶
    Resistant homes will pay nearly the same prices as everyone else. So the cinder block home owner is subsidizing the sticks houses.

    Same happens in autos. Monitored safe driving nets at most 10-20% discounts. Biggest factor is age, and even then, difference between 20yo and 35yo driver is 38%.

    There are no tricks or deals to insurance.

    replies(4): >>42734248 #>>42734322 #>>42734336 #>>42734383 #
    2. ◴[17 Jan 25 04:57 UTC] No.42734248[source]▶
    3. nerdponx ◴[17 Jan 25 05:15 UTC] No.42734322[source]▶
    > Biggest factor is age, and even then, difference between 20yo and 35yo driver is 38%.

    That's because age is both observable and strongly predictive of risk.

    replies(1): >>42736859 #
    4. typewithrhythm ◴[17 Jan 25 05:17 UTC] No.42734336[source]▶
    This is more a matter of market rules than an inherent property of insurance; currently we do not let insurers get sufficiently granular due to some assumptions about wider social benefits of a less individualised system.

    This might be reworked to allow for fire resistant designs to be a factor.

    5. chii ◴[17 Jan 25 05:28 UTC] No.42734383[source]▶
    > Resistant homes will pay nearly the same prices as everyone else.

    but this means the insurance company is mispricing (or is being forced to misprice) the risk of resistant homes.

    In theory, when correct pricing happens, these resistant homes should face less claims, and thus the premiums paid on them is high profit margin; ala, the customer is a good one, and the insurer should persue this customer more than another. This ought to results in a discount for said customer's premium, as more insurers vie for this customer over another.

    replies(1): >>42734708 #
    6. creato ◴[17 Jan 25 06:33 UTC] No.42734708[source]▶
    This does happen, it's just done at neighborhood level. That makes some sense, the biggest fire risk factor for your house is probably your neighbor's house burning down.
    replies(2): >>42734859 #>>42734900 #
    7. Ekaros ◴[17 Jan 25 07:03 UTC] No.42734859{3}[source]▶
    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.
    replies(1): >>42735118 #
    8. Scoundreller ◴[17 Jan 25 07:12 UTC] No.42734900{3}[source]▶
    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.

    9. consp ◴[17 Jan 25 07:58 UTC] No.42735118{4}[source]▶
    Don't know about the us but here we have fire breaks everywhere in the form of low depth waterways (non navigable). They also act as backup water reserves when the mains runs dry. So by design only parts of the neighborhood will burn down.
    replies(1): >>42737458 #
    10. 15155 ◴[17 Jan 25 12:34 UTC] No.42736859[source]▶
    Try and extend this logic to other highly correlative, immutable individual factors.
    11. aquaticsunset ◴[17 Jan 25 13:47 UTC] No.42737458{5}[source]▶
    Yep, those exist across the western US too. I think many people are underestimating the scale and intensity of the winds California experienced. A single house on fire with relatively regular weather conditions isn't likely to spread to others - despite the "ha American houses dumb and wood" sentiment on this topic, there are building codes and fire safety is absolutely considered. But the Santa Ana winds are extremely dry and extremely powerful.

    It's a hard engineering problem to solve, but an increasingly urgent one now that these major events are becoming more intense and frequent.