Is the world becoming uninsurable?

Like we see in California, when the government sets a price ceiling, insurance companies just leave. Same in Florida. If the free market truly was allowed run normally, the insurance rates in Pacific Palisades or on the Florida coast would be so high that no one could afford to live there. Is that a bad thing? If someone was living in a house near where they tested missiles, we'd call them crazy. At what point can we say the same about people building and rebuilding over and over in these disaster areas.

I've been trying to talk to people locally, a place with lots of homes built in the woodland-urban interface, about the risks of climate change and how insurance will have to change. Unfortunately these discussions almost never go well, because it seems that most people have at best a surface level understanding of what insurance is and how it works, and everyone is convinced that it's a full scam and insurance companies are fabricating everything. When in reality, insurance is one of the rare areas where risks are very well assessed, not just by the initial insurer but also by a second party when reinsurance is purchased. And often those exits from the insurance markers are due to inability to purchase reinsurance.

Of course, explaining anything in detail is likely to make people think you work in the industry (I do not) and get accused of being a shill. All of which proves to me that older generations had a much easier life because nobody so financially ignorant today is in any sort of position to be able to buy a home.

All that said, I don't think it's actually a price ceiling. It's a limitation of what factors can be taken into account to set rates, and constitutional amendment from Prop 108 prevents the legislature from changing it.

At some level, insurance is about spreading out financial risk. Insurance companies would love for every policy to be profitable, but if we let it go that far, it's merely a savings account with negative interest rates. At another level, insurance is about analyzing risk and making it more expensive to take bigger risks. Where do we want the tradeoff between these things? Whatever we choose, we have to have some ability to predict / evaluate risk.

In the face of climate change, places that have been safe for a very long time are becoming unsafe. But I don't see a reason these shifts won't happen over and over as climate change unfolds. It might be worse than mass migrations... migrations to locations which later become dangerous, turning into recurring mass migrations.

How well can we predict where it will be safe in the coming decades and where it won't. Coastal land at or below current sea level (plus storm surge) is fairly predictable, especially where there isn't the population density (and money) to support building sea walls. But with things like rivers changing course (e.g., https://en.wikipedia.org/wiki/Alsek_River), it might become very difficult to predict what's going to be safe down the road. Today we talk about things like 100-year flood plains, but how will we establish flood probabilities when the river that might flood in 10 or 20 years doesn't even exist today?

Are the people who get unlucky with predictions just screwed because their home equity is gone? Or are we going to decide to shoulder the burden together? We're going to find out a lot about humanity, the role of government, etc. as we go through all of this.