Is the world becoming uninsurable?

American, living in area prone to natural disasters: "Is the WHOLE WORLD becoming uninsurable?"

The answer is obviously "no" since there are other parts of the world that don't live on a hurricane highway nor build houses made from firewood in an area prone to wildfires.

It’s possible that solve the hurricane problems with proper building regulations and lower the risk of huge wildfires with controlled burning. But the US as always prefers to pretend that there’s nothing to be done when other parts of the world has figured it out.

We have cyclones here similar to the hurricanes in the US and usually it just blows over some trees maybe causes a power outage. The absolute worst I have experienced was 3 days without power. I have never seen a house destroyed by a cyclone here.

As for wildfires, they do unfortunately claim a few houses most years.

Hurricanes are mostly just flood damage in the US, and some wind/debris damage exactly like the blown over trees you mention.

Houses generally aren't destroyed by hurricanes in the sense of "the storm literally ripped them up", they're made uninhabitable by storm surges (flood).

The scary ones are tornados.

And tornados do genuinely fuck shit up. Even in those "enlightened" parts of the world you think have proper building regulations. If you're interested, go look at the recaps of tornado damage where they hit Europe here: https://en.wikipedia.org/wiki/List_of_European_tornadoes_and...

Note the number of homes destroyed and people killed - plenty of both, even in those countries that prefer brick/concrete homes.

Hurricanes throw branches. Tornados throw cars.

The real problem is that we're politically/socially unwilling to transfer the risk to the people who are responsible for creating it: Wealthy coastal landowners believe that the cost of home insurance should be about $2000/year. If their properties actually cost $200,000 per year to insure, then that's what they should have to pay! If they don't like it, they should either build something cheaper (that's the other half of the product) or move to somewhere with less risk.

Tornados are almost the perfect example of an insurable hazard: Very low probability, very high damage, very widely distributed across the affected areas:

https://mrcc.purdue.edu/gismaps/cntytorn#

Click around that neat interactive map, you'll see that the tornado is typically a few miles long and a few hundred yards wide, there are a few thousand severe tornadoes scattered all over the Midwest and somewhat fewer on the east coast in the past 70 years. It's not feasible to build houses everywhere that will stand up to an F5 tornado throwing cars. But they only cause a total loss of a tiny fraction of all houses in the country, and there are relatively few choices anyone east of Texas can make that would meaningfully impact their risk.

You could price insurance premiums at the risk of a tornado times the cost of the insured assets, plus a 10% administrative fee/profit margin, and those rates would be affordable. Maybe a handful of people would choose to live in Colorado instead of a few hundred miles east in Kansas because the cost of this 'tornado insurance' was higher in Kansas, but even in Tornado Alley it wouldn't be unaffordable.

Conversely, if you look at the hurricane incidence and storm surge risk map:

https://coast.noaa.gov/hurricanes/#map=4/32/-80

https://experience.arcgis.com/experience/203f772571cb48b1b8b...

and population density along the gulf coast:

https://luminocity3d.org/WorldPopDen/#7/28.541/-88.011

It's clear that people are choosing to build houses in the narrow strip of low-lying land that's right along the coast and vulnerable to high-probability storm surges! If insurance was priced at cost of assets + administration times risk of loss, it would be really, really expensive.