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Is the world becoming uninsurable?

(charleshughsmith.substack.com)
476 points spking | 1 comments | 17 Jan 25 00:32 UTC | HN request time: 0s | 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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CalRobert ◴[17 Jan 25 05:54 UTC] No.42734498{3}[source]▶
For what it’s worth, you can get a house with no insurance or mortgage. They tend to be cheap. I had an uninsured thatched cottage for a while, it was 68k
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lostlogin ◴[17 Jan 25 06:09 UTC] No.42734567{4}[source]▶
You can have a mortgage with no insurance (after purchase day) here in New Zealand. The bank won’t like it, but also won’t know.
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girvo ◴[17 Jan 25 06:12 UTC] No.42734584{5}[source]▶
Banks in Australia were the same, but some are now starting to demand proof of insurance yearly to counter that loophole.
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thaumasiotes ◴[17 Jan 25 07:02 UTC] No.42734852{6}[source]▶
What's the thinking here? The bank is loaning you money and they want to ensure you buy a particular product.

They're the ones with the money. They can easily guarantee that you buy the product they want. All they need to do is give you less money, buy the product themselves, and give it to you.

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1. wakawaka28 ◴[17 Jan 25 07:58 UTC] No.42735117{7}[source]▶
I don't know what you mean. Banks loan out money for you to buy a house, but you don't technically own it (that is, you have no title) until it is paid off. The bank wants the house itself as collateral for the loan. It cannot be collateral if something destroys it in the 30 years or whatever during which you are repaying the loan. Therefore, they demand insurance to make sure that they will be repaid. The insurance requirement protects you but also the bank, because what do you think the odds are that someone who just lost their house in a fire or something is going to keep making mortgage payments for a pile of ashes?