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Is the world becoming uninsurable?

(charleshughsmith.substack.com)
478 points spking | 1 comments | 17 Jan 25 00:32 UTC | HN request time: 0.214s | source
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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.

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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.
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iandanforth ◴[17 Jan 25 04:48 UTC] No.42734200[source]▶
"Correctly" is doing a lot of work here. Some readers might miss that this is double edged. Insurance is a mandated product. You don't have a choice if you want a mortgage, or want to run a business. So while it is true that the sustainable price for insurance in many areas is higher than what current regulations allow, let's not forget what happens in an unregulated insurance market; price gouging.
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1. wakawaka28 ◴[17 Jan 25 07:52 UTC] No.42735083[source]▶
Insurance (at least the kind we are talking about) is only mandatory if you have loans, and even then it is not 100% mandated. We do need insurance regulations, but price caps limit what things actually make sense to cover. To put it another way, you are free to buy land in a risky area if you want, but nobody has to insure it or loan you money for it. If you find someone who will loan you the money if you can get insurance, then you can't get insurance, that sucks for you but nobody owes it to you to hand over money on a losing investment. These requirements can be abused, but there really isn't much evidence of insurers, lenders, and investors colluding to rip people off.