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Insurers Are Deserting Homeowners as Climate Shocks Worsen

44 points by Townley 2y ago

InDubioProRubio 2y ago
If you draw all those events, the insurrance withdrawl, the perma-wars, the coups and djihadist groups on a globe, do they form a equatorial ring and can you measure the expansion rate of the red zone?
A_D_E_P_T 2y ago
I hate the insurance industry so much, bros. What I hate, most of all, is that it's so often mandated -- and, yet, at the same time, so complex and annoying to attain. Half the time I need to buy some BS insurance for my business, I can't even purchase it online, I need to fill out a 20-part form and then "Speak with an Agent," who will resist giving me all of my options and make purchasing a personal ordeal. I had considered, in a half-serious way, setting up an "insurance" company (probably incorporated in Sealand) that sells "basic packages" for very low prices -- and when you "speak with an agent," explicitly tells its customers that it will never pay out any claims. It would be nothing more than a fig-leaf, so that you can tell third parties, "yeah, I have insurance, don't bother me about it." It would probably be illegal, which is sad. I just don't want to be annoyed and don't like being forced to deal with grifters.
- badpun 2y ago
  That's how it works in Poland. A client required me to get an insurance for my 1-person contracting company, and I was able to get a policy that only covers trivial things like spilling hot coffee on someone, but none of the software risks. The client was satisfied (they're a giant bureucracy, and the the contractor procurement people just needed any policy to be able to tick a box), while I spent minimal cash.
  - jddj 2y ago
    I would hate this, I think. The relatively low (and I have to tick boxes for most of the high risk industries on the form) amount that I pay each year for what seems to be a nice PI policy is easily worth it for the peace of mind.
    - A_D_E_P_T 2y ago
      I would love it. As things are now, I'm mandated to spend $XXXX/year on insurance that I've never used and know, for a near certainty, that I'm never going to use. I'd really rather not. I've looked at the statistics and, for me, it's a better bet to eschew insurance. (Which, generally speaking, it would have to be, otherwise the insurance industry would be losing money.)
      - Arainach 2y ago
        >know, for a near certainty, that I'm never going to use. That's what most people say right up until they make a claim.
        A_D_E_P_T 2y ago
        I don't want to make any claims, though. I'd be much happier in a position where I'm totally unable to make claims. (And don't have to deal with the insurance industry.) I'd even pay good money for (de facto-) fake insurance, just so mandates and overly-bureaucratic clients/partners leave well enough alone.
        dagw 2y ago
        I don't want to make any claims, though. I think you're missing the point of why these "overly-bureaucratic clients" are insisting on insurance. I don't want you to have insurance to keep you safe, I need you to have insurance to keep me safe. When the widget you built for me breaks and damages my customer and I end up owing them €1m, I want to be able to recoup at least some of that cost from you. It won't be you making a claim on your insurance, but me (or rather my insurance company) And as someone who used to be at one of those "overly-bureaucratic clients", we not only required (and checked) that you had insurance, but also that your insurance coverage was actually high enough for project in question.
prmoustache 2y ago
So if property price drops completely because insurance do not want to insure, it should make buying houses in cash and avoid mortgage easier right? House becomes a cheap commodity, everybody can then buy a house again, insurers can insure them again because they are cheap. The market correct itself. Problem solved?
- alex_duf 2y ago
  >Problem solved? It depends if the problem is the insurance or the climate
- potato3732842 2y ago
  In theory, sure. In reality the racket between insurers, government and banking will find strings to pull so that that never happens. They're in on every deal. They're gonna fight tooth and nail to prevent the precedent of getting cut out. I don't think it's fundamentally uneconomical to live in these places. It's just uneconomical in the current "nobody has any responsibility for anything it's all just financialized away" status quo in which it's ok to have plastic siding over a plastic-wood structure and shrubbery all about status quo. People will have to return to the "old ways" of corrugated steel, clapboard (or masonry or cement board) and super short grass and dirt for large distances around structures.
- Octoth0rpe 2y ago
  Everyone (with some degree of savings, which really isn't everyone) will be able to buy a house in an area where that housing and local infrastructure will be regularly devastated. Areas with a more amenable climate will continue to have insurable mortgages and inaccessible housing prices. So if the 'problem' is _simply_ that people can't buy houses, I guess it's solved? If one words it more carefully - people can't buy houses that allow for a greater degree of economic stability and wealth accumulation - then no, problem not at all solved.
- lowercased 2y ago
  They'd need to be so cheap that rebuilding (or maybe even repairing) are not things people would care to do. For a $40k house, in today's dollars, it might just be a risk I wouldn't care to rebuild if there's massive damage; just move away. Someone would have to take care of cleanup/removal though. I see where you're going, and sort of think it could happen in some areas, but regulations might not permit that any time soon, even if 'pure' market conditions might call for it. Interesting to think what this might do for the 'tiny house' market. Start zoning more places where people can put up $30k tiny houses. You might still need insurance for protection against personal injury on/in the property, but rebuild/repair wouldn't need to be a factor.
ttyprintk 2y ago
https://archive.ph/KZXmI https://archive.ph/KZXmI
idbehold 2y ago
The climate is changing and is affecting regions we knew would be impacted by climate change 30+ years ago. The insurance companies cannot make a profit (and thus would not choose to operate) in these areas now that they're being impacted by climate change. On one hand this seems like the market working exactly as it should be. People should've moved out of these regions in the last 30 years given the information about climate change, but they didn't. On the other hand many of the people living in these regions don't really have the means to move away and they're the ones disproportionately affected by all of this.
- mikrl 2y ago
  How do you feel about the denialist argument that since people still buy expensive waterfront property, climate change is not a big deal? My interpretations would probably be some combination of - information asymmetry leading to demand distorting upward - the people who are buying the property have priced in the loss relative to their utility and will be relatively unaffected should they be left holding the watery bag
  - iambateman 2y ago
    Eh, people (including me) are very good at optimizing for short-run happiness and less-good at optimizing for longer-run happiness. A million people a year get arrested in the US for drunk driving...and that's apparently the equilibrium. If that many people are willing to risk their lives and their freedom to save money on an Uber, it's not hard to believe that millions of people would be happy to buy beautiful waterfront property. The risks are known but not totally apparent.
    - alwa 2y ago
      There’s also this notion of normalcy bias: even if I accept the risk in the abstract, I genuinely believe it won’t happen to me personally. https://en.m.wikipedia.org/wiki/Normalcy_bias https://en.m.wikipedia.org/wiki/Normalcy_bias
  - pavlov 2y ago
freen 2y ago
Ahh, yes, the insurance industry, clearly in the thrall of the woke left.
mensetmanusman 2y ago
Home prices are too high to insure. This is for many many reasons. Homes should be an expense, not an asset.
kittikitti 2y ago
The climate firms are also faking data to protect their clients home values in places like Florida. The models are so wrong it's ridiculous. The amount of fraud going on from home insurance is astronomical.
- goneri 2y ago
  What you mean by "climate firms"?
- notTooFarGone 2y ago
  climate firms you got to be kidding me. BIG CLIMA IS OUT TO GET YA.
  - kylebenzle 2y ago
    I agree, none of us knows what a climate firm even is though.
- BriggyDwiggs42 2y ago
  What ya really gotta watch out for are the weather firms.
a3w 2y ago
To save the climate, it is best to live on 20 to 30 square meters per person. So I always like it when people do not build new houses. Currently, the living space per person is still expanding. Seems to be running into a wall or resources or deficit of clean energy.
jmclnx 2y ago
>Communities that are deemed too dangerous to insure face the risk of falling property values, which means less tax revenue Now that is the funnest quote I have seen in 2024. I would love to know what government will lower your property tax if your house value falls ? I have never seen that happen ever nor do I know anyone who has seen that happen over the past 40 years.
- aaronblohowiak 2y ago
  What state are you in? This is quite common in many parts of the country..
  - jmclnx 2y ago
    I do not want to ID the state, but I live above the mason-dixon line and east of PA.
- lightedman 2y ago
  "I would love to know what government will lower your property tax if your house value falls ?" Plano, TX.
  - dylan604 2y ago
    Why did you used all of those extra letters? TX would have sufficed
- kylebenzle 2y ago
  It is very common for a home owner to have their home value decrease.
  - ellisv 2y ago
    Real estate is complicated but physical houses are depreciating assets - this is how rental properties are treated by landlords. Regular maintenance, land value, and market value usually offsets the depreciation.
- 2y ago
georgeburdell 2y ago
One of my relatives has a single level house directly on a coastal waterway in Florida. Never had any problems since it was built in the 60s, then in 2 of the last 8 years the inside has gotten inundated with storm surge from a major hurricane, requiring a complete interior gutting. Their neighbors houses both got destroyed and now one is on stilts and the other is on a six foot mound. He keeps repairing because he is a general contractor and the house has history to him.
rayiner 2y ago
[flagged]
- sofixa 2y ago
  > well supported scientific explanations that are politically unpleasant—you need to pay more for energy, criminals are low IQ and low impulse control Do you mean to say that low IQ and low impulse control are the "well supported scientific" explanation for crime? That seems wildly improbable. Ted Kaczynski being the obvious counterexample, but there are many other premeditated criminals who are intelligent. And that's only if we narrow "crime" to mean violent crime against people/things, but if we add in financial crimes/fraud/etc. this becomes even more easily disprovable.
  - rayiner 2y ago
    [flagged]
    - sofixa 2y ago
      It doesn't matter what I think, it's blatantly and obviously false. Ted Kazcynski, Charles Manson, Bernie Madoff, Jeffrey Epstein are convicted criminals whose crimes cannot be blamed on IQ nor impulse control.
      - rayiner 2y ago
        Both things are true: https://www.realclearscience.com/blog/2021/10/12/why_do_geniuses_commit_crime_797186.html https://www.realclearscience.com/blog/2021/10/12/why_do_geni... (“Crime is typically thought of as a low-IQ activity, and most scientific research bears this out. Lower levels of intelligence are broadly associated with increases in criminal behavior, though the exact reasons for this correlation are heavily debated. Curiously, however, this trend doesn't seem to hold for individuals whose IQ scores place them in the top 0.1% of intelligence.”).
- keybored 2y ago
  I don’t think this is the thread to launder your IQ ideas.
ksynwa 2y ago
The cool thing is that private insurers invest heavily in fossil fuel. https://consumerwatchdog.org/insurance/top-10-us-insurance-companies-invest-51-billion-fossil-fuels/ https://consumerwatchdog.org/insurance/top-10-us-insurance-c...
- ttyprintk 2y ago
  Property insurers are even more intense about it than life and business insurers. Berkshire Hathaway and State Farm Insurance are each something like $100B in fossil fuels.
- epoxia 2y ago
  Isn't that just how they hedge bets? Their performance is correlated with the claims they receive. If fossil fuels perform poorly -> less environmental damage -> less claims. And vice versa
- infecto 2y ago
  Unfortunately this article is a miss as it does not compare those investments to their entire portfolio size. Renewables have made great strides but the world still runs on the backs of fossil fuels.
jmyeet 2y ago
This isn't because of climate change. It's because of bad laws combined with the housing chickens coming home to roost. On the legislation front, a series of court cases and legislation combined with weak oversight meant that something like 70% of the nation's roof insurance claims were in Florida. There was clear fraud in many cases. Because of this legislation was introduced that made it difficult for any homeowner to file a legitimate claim. Combine this with under-capitalization by insurers and weak oversight and it's just a mess. But the big one is housing. It's too expensive. And this is another inevitable consequence. It used to be that housing depreciated. That no longer seems to be the case. The replacement value is only going up. This is the foreseeable outcome of years of government policy designed to increase home values. Ultimately we need to stop treating housing as an investment, as your retirement nest egg. All this does is steal from the next generation. That's it. Withholding shelter (ie housing) either by limiting supply through regulation and legislation or simply by pricing people out is state violence. Housing prices need to come down. Hoarding housing needs to be massively disincentivized. We need to stop giving massive tax breaks to homeowners. None of this is popular but without major reform we're headed down a bad road. Canada is heading towards crisis at the moment and many of its problems can be tied directly back to soaring house prices. The consequences of high house prices are everywhere too. More expensive commercial real estate means businesses need to recoup that cost through higher prices.
- switch007 2y ago
  Totally agree. Same issues in the UK too. House prices are a cancer on society
- bashmelek 2y ago
  I’m glad to hear mention of roofing claims finally. I live in Florida, my insurance shot up. No claims, I live away from the water. I paid for my own roof. But a lot of people around me got free roofs, and I remember getting constant calls for “free roof inspections.”
_1tem 2y ago
Insurance is such a scam. Pay me money to cover your loss, except when I decide not to.
iandanforth 2y ago
As it's only tangentially mentioned in the article people should know that in many (most?) places insurers can't raise prices commensurate with risk making "nonrenewal" their only option. These regulations have reasonable origins because as a mandated product it's pretty tempting to price gouge, but there's no exception for circumstances where the price really should be 3x the historical cost.
- infecto 2y ago
  This is the massive failure that exists in many states. You are unable to raise rates but the risk has increased and premiums must increase. Both CA and FL are huge losers in this regard. Heavy regulation on rate increases but then happy to create underfunded state policies for their constituents.
  - toomuchtodo 2y ago
    Root cause is that wages cannot sustain climate liabilities (insurance costs) that have been incurred by decades of fossil fuel strategy. People also can't afford to move, it is costly to build new housing due to labor and material costs. Bit of a death spiral all around.
tlogan 2y ago
The issue here has less to do with climate change itself and more to do with a combination of regulatory and economic factors. While left-leaning outlets might point to climate change as the primary cause, the reality is more nuanced—similar issues are visible in other sectors, such as health insurance. Here are a few key points to consider: - Insurance Company Consolidation: As the industry consolidates, large insurers gain the ability to strategically drop unprofitable market segments. This allows them to improve profitability, but it often leaves consumers in those markets with fewer or no options. - Regulations: Some states, like California, have introduced stringent requirements that compel insurers to continue providing coverage, even in high-risk areas. In response, many insurers have opted to exit these markets entirely. Consolidation has made this easier for them to implement at scale. - Lack of Investment in Disaster Prevention: Across both Democrat- and Republican-led states, we’ve seen a decline in state and federal spending on preventive measures for natural disasters. This shortfall exacerbates the risks insurers face, further disincentivizing them from operating in high-risk areas.
- yodon 2y ago
  > The issue here has less to do with climate change itself and more to do with a combination of regulatory and economic factors. The issue is not that the insurance regulations have tightened or changed. The issue is that the climate risks have heightened and the regulations have NOT changed to match the heightened climate risks. Small increases in average temperature of the air leads to large decreases in average moisture content of brush and vegetation, making fires more common and more likely to impact more homes. The insurers have the data, that's why they are acting the way they are. Fires are more common and fires are larger. Not politics. Actuarial data compiled by insurance companies. If you've spent any time with insurance CEOs, you'll know they are not bleeding heart liberals. They tend to be very conservative and very data driven. And they have the data and it impacts their business. The regulatory issue is that, to prevent historical forms of bad behavior on the part of insurers, state regulators require that insurers can only set pricing for fire insurance (for example) on the basis of historical data, not on the basis of forward-looking projections. That's the right thing for regulators to do in normal circumstances, when the risk environment isn't changing, but if the risk environment is changing it means you as an insurer will need to pay out money in the future at a higher rate than you did in the past, but you can only collect money based on lower historical payout rates. You are, in practice, required by the regulators to now offer your product at a loss not because the regulations changed but because the average daily temperature is increasing ever so slightly but just enough to significantly increase your cost. You don't want to offer a product at a loss, so you leave the market. As to why insurance is a regulated industry, in large part that's because insurance is one of the few products the government requires you to purchase, distorting the market, and also in large part because there are massive asymmetries of information between consumer and provider - insurance companies have much more information about risks than insurance customers do, which prior to regulation led to abusive practices on the part of the insurers, in ways that led voters to say "this is a problem that needs to be fixed." All big problems are hard, and insurance regulation is a big hard problem. If you just say "the environment is changing, so insurers should be able to set prices based on forward-looking projections" you help with the climate pricing increases but are likely to get other unrelated bad behavior at the same time (forward-looking projections are notoriously easy to fudge or fake in ways that are massively favorable to the person making the projections). If you don't allow for forward-looking projections, you lose insurers, if you do allow for it, you get abuses. "Just do it the right way" is much easier to demand in a blog post or comment thread than it is to deliver in legislation.
nojvek 2y ago
Meanwhile Desantis in Florida is spending $15M of taxpayer money to ensure books don’t say gay. That 100 or so trans folks in prison can’t access the bathroom of their choice or get healthcare they need. Millions spent on supposed woke war to show the Dems they are “anti-woke”. Senator Rick Scott who was caught with pants down embezzling billions in insurance fraud was voted again. Florida did this to themselves.
robocat 2y ago
I have a flood-prone coastal property (value a bit above median price for my city). Anyone have ideas on how to invest in other securities/properties to self-insure?

44 points by Townley 2y ago

If you draw all those events, the insurrance withdrawl, the perma-wars, the coups and djihadist groups on a globe, do they form a equatorial ring and can you measure the expansion rate of the red zone?

A_D_E_P_T 2y ago

I hate the insurance industry so much, bros. What I hate, most of all, is that it's so often mandated -- and, yet, at the same time, so complex and annoying to attain. Half the time I need to buy some BS insurance for my business, I can't even purchase it online, I need to fill out a 20-part form and then "Speak with an Agent," who will resist giving me all of my options and make purchasing a personal ordeal. I had considered, in a half-serious way, setting up an "insurance" company (probably incorporated in Sealand) that sells "basic packages" for very low prices -- and when you "speak with an agent," explicitly tells its customers that it will never pay out any claims. It would be nothing more than a fig-leaf, so that you can tell third parties, "yeah, I have insurance, don't bother me about it." It would probably be illegal, which is sad. I just don't want to be annoyed and don't like being forced to deal with grifters.

badpun 2y ago
That's how it works in Poland. A client required me to get an insurance for my 1-person contracting company, and I was able to get a policy that only covers trivial things like spilling hot coffee on someone, but none of the software risks. The client was satisfied (they're a giant bureucracy, and the the contractor procurement people just needed any policy to be able to tick a box), while I spent minimal cash.
- jddj 2y ago
  I would hate this, I think. The relatively low (and I have to tick boxes for most of the high risk industries on the form) amount that I pay each year for what seems to be a nice PI policy is easily worth it for the peace of mind.
  - A_D_E_P_T 2y ago
    I would love it. As things are now, I'm mandated to spend $XXXX/year on insurance that I've never used and know, for a near certainty, that I'm never going to use. I'd really rather not. I've looked at the statistics and, for me, it's a better bet to eschew insurance. (Which, generally speaking, it would have to be, otherwise the insurance industry would be losing money.)
    - Arainach 2y ago
      >know, for a near certainty, that I'm never going to use. That's what most people say right up until they make a claim.
      - A_D_E_P_T 2y ago
        I don't want to make any claims, though. I'd be much happier in a position where I'm totally unable to make claims. (And don't have to deal with the insurance industry.) I'd even pay good money for (de facto-) fake insurance, just so mandates and overly-bureaucratic clients/partners leave well enough alone.
        dagw 2y ago
        I don't want to make any claims, though. I think you're missing the point of why these "overly-bureaucratic clients" are insisting on insurance. I don't want you to have insurance to keep you safe, I need you to have insurance to keep me safe. When the widget you built for me breaks and damages my customer and I end up owing them €1m, I want to be able to recoup at least some of that cost from you. It won't be you making a claim on your insurance, but me (or rather my insurance company) And as someone who used to be at one of those "overly-bureaucratic clients", we not only required (and checked) that you had insurance, but also that your insurance coverage was actually high enough for project in question.

prmoustache 2y ago

So if property price drops completely because insurance do not want to insure, it should make buying houses in cash and avoid mortgage easier right? House becomes a cheap commodity, everybody can then buy a house again, insurers can insure them again because they are cheap. The market correct itself. Problem solved?

alex_duf 2y ago
>Problem solved? It depends if the problem is the insurance or the climate
potato3732842 2y ago
In theory, sure. In reality the racket between insurers, government and banking will find strings to pull so that that never happens. They're in on every deal. They're gonna fight tooth and nail to prevent the precedent of getting cut out. I don't think it's fundamentally uneconomical to live in these places. It's just uneconomical in the current "nobody has any responsibility for anything it's all just financialized away" status quo in which it's ok to have plastic siding over a plastic-wood structure and shrubbery all about status quo. People will have to return to the "old ways" of corrugated steel, clapboard (or masonry or cement board) and super short grass and dirt for large distances around structures.
Octoth0rpe 2y ago
Everyone (with some degree of savings, which really isn't everyone) will be able to buy a house in an area where that housing and local infrastructure will be regularly devastated. Areas with a more amenable climate will continue to have insurable mortgages and inaccessible housing prices. So if the 'problem' is _simply_ that people can't buy houses, I guess it's solved? If one words it more carefully - people can't buy houses that allow for a greater degree of economic stability and wealth accumulation - then no, problem not at all solved.
lowercased 2y ago
They'd need to be so cheap that rebuilding (or maybe even repairing) are not things people would care to do. For a $40k house, in today's dollars, it might just be a risk I wouldn't care to rebuild if there's massive damage; just move away. Someone would have to take care of cleanup/removal though. I see where you're going, and sort of think it could happen in some areas, but regulations might not permit that any time soon, even if 'pure' market conditions might call for it. Interesting to think what this might do for the 'tiny house' market. Start zoning more places where people can put up $30k tiny houses. You might still need insurance for protection against personal injury on/in the property, but rebuild/repair wouldn't need to be a factor.

ttyprintk 2y ago

https://archive.ph/KZXmI https://archive.ph/KZXmI

idbehold 2y ago

The climate is changing and is affecting regions we knew would be impacted by climate change 30+ years ago. The insurance companies cannot make a profit (and thus would not choose to operate) in these areas now that they're being impacted by climate change. On one hand this seems like the market working exactly as it should be. People should've moved out of these regions in the last 30 years given the information about climate change, but they didn't. On the other hand many of the people living in these regions don't really have the means to move away and they're the ones disproportionately affected by all of this.

mikrl 2y ago
How do you feel about the denialist argument that since people still buy expensive waterfront property, climate change is not a big deal? My interpretations would probably be some combination of - information asymmetry leading to demand distorting upward - the people who are buying the property have priced in the loss relative to their utility and will be relatively unaffected should they be left holding the watery bag
- iambateman 2y ago
  Eh, people (including me) are very good at optimizing for short-run happiness and less-good at optimizing for longer-run happiness. A million people a year get arrested in the US for drunk driving...and that's apparently the equilibrium. If that many people are willing to risk their lives and their freedom to save money on an Uber, it's not hard to believe that millions of people would be happy to buy beautiful waterfront property. The risks are known but not totally apparent.
  - alwa 2y ago
    There’s also this notion of normalcy bias: even if I accept the risk in the abstract, I genuinely believe it won’t happen to me personally. https://en.m.wikipedia.org/wiki/Normalcy_bias https://en.m.wikipedia.org/wiki/Normalcy_bias
- pavlov 2y ago

freen 2y ago

Ahh, yes, the insurance industry, clearly in the thrall of the woke left.

mensetmanusman 2y ago

Home prices are too high to insure. This is for many many reasons. Homes should be an expense, not an asset.

kittikitti 2y ago

The climate firms are also faking data to protect their clients home values in places like Florida. The models are so wrong it's ridiculous. The amount of fraud going on from home insurance is astronomical.

goneri 2y ago
What you mean by "climate firms"?
notTooFarGone 2y ago
climate firms you got to be kidding me. BIG CLIMA IS OUT TO GET YA.
- kylebenzle 2y ago
  I agree, none of us knows what a climate firm even is though.
BriggyDwiggs42 2y ago
What ya really gotta watch out for are the weather firms.

a3w 2y ago

To save the climate, it is best to live on 20 to 30 square meters per person. So I always like it when people do not build new houses. Currently, the living space per person is still expanding. Seems to be running into a wall or resources or deficit of clean energy.

jmclnx 2y ago

>Communities that are deemed too dangerous to insure face the risk of falling property values, which means less tax revenue Now that is the funnest quote I have seen in 2024. I would love to know what government will lower your property tax if your house value falls ? I have never seen that happen ever nor do I know anyone who has seen that happen over the past 40 years.

aaronblohowiak 2y ago
What state are you in? This is quite common in many parts of the country..
- jmclnx 2y ago
  I do not want to ID the state, but I live above the mason-dixon line and east of PA.
lightedman 2y ago
"I would love to know what government will lower your property tax if your house value falls ?" Plano, TX.
- dylan604 2y ago
  Why did you used all of those extra letters? TX would have sufficed
kylebenzle 2y ago
It is very common for a home owner to have their home value decrease.
- ellisv 2y ago
  Real estate is complicated but physical houses are depreciating assets - this is how rental properties are treated by landlords. Regular maintenance, land value, and market value usually offsets the depreciation.
2y ago

georgeburdell 2y ago

One of my relatives has a single level house directly on a coastal waterway in Florida. Never had any problems since it was built in the 60s, then in 2 of the last 8 years the inside has gotten inundated with storm surge from a major hurricane, requiring a complete interior gutting. Their neighbors houses both got destroyed and now one is on stilts and the other is on a six foot mound. He keeps repairing because he is a general contractor and the house has history to him.

rayiner 2y ago

[flagged]

sofixa 2y ago
> well supported scientific explanations that are politically unpleasant—you need to pay more for energy, criminals are low IQ and low impulse control Do you mean to say that low IQ and low impulse control are the "well supported scientific" explanation for crime? That seems wildly improbable. Ted Kaczynski being the obvious counterexample, but there are many other premeditated criminals who are intelligent. And that's only if we narrow "crime" to mean violent crime against people/things, but if we add in financial crimes/fraud/etc. this becomes even more easily disprovable.
- rayiner 2y ago
  [flagged]
  - sofixa 2y ago
    It doesn't matter what I think, it's blatantly and obviously false. Ted Kazcynski, Charles Manson, Bernie Madoff, Jeffrey Epstein are convicted criminals whose crimes cannot be blamed on IQ nor impulse control.
    - rayiner 2y ago
      Both things are true: https://www.realclearscience.com/blog/2021/10/12/why_do_geniuses_commit_crime_797186.html https://www.realclearscience.com/blog/2021/10/12/why_do_geni... (“Crime is typically thought of as a low-IQ activity, and most scientific research bears this out. Lower levels of intelligence are broadly associated with increases in criminal behavior, though the exact reasons for this correlation are heavily debated. Curiously, however, this trend doesn't seem to hold for individuals whose IQ scores place them in the top 0.1% of intelligence.”).
keybored 2y ago
I don’t think this is the thread to launder your IQ ideas.

ksynwa 2y ago

The cool thing is that private insurers invest heavily in fossil fuel. https://consumerwatchdog.org/insurance/top-10-us-insurance-companies-invest-51-billion-fossil-fuels/ https://consumerwatchdog.org/insurance/top-10-us-insurance-c...

ttyprintk 2y ago
Property insurers are even more intense about it than life and business insurers. Berkshire Hathaway and State Farm Insurance are each something like $100B in fossil fuels.
epoxia 2y ago
Isn't that just how they hedge bets? Their performance is correlated with the claims they receive. If fossil fuels perform poorly -> less environmental damage -> less claims. And vice versa
infecto 2y ago
Unfortunately this article is a miss as it does not compare those investments to their entire portfolio size. Renewables have made great strides but the world still runs on the backs of fossil fuels.

jmyeet 2y ago

This isn't because of climate change. It's because of bad laws combined with the housing chickens coming home to roost. On the legislation front, a series of court cases and legislation combined with weak oversight meant that something like 70% of the nation's roof insurance claims were in Florida. There was clear fraud in many cases. Because of this legislation was introduced that made it difficult for any homeowner to file a legitimate claim. Combine this with under-capitalization by insurers and weak oversight and it's just a mess. But the big one is housing. It's too expensive. And this is another inevitable consequence. It used to be that housing depreciated. That no longer seems to be the case. The replacement value is only going up. This is the foreseeable outcome of years of government policy designed to increase home values. Ultimately we need to stop treating housing as an investment, as your retirement nest egg. All this does is steal from the next generation. That's it. Withholding shelter (ie housing) either by limiting supply through regulation and legislation or simply by pricing people out is state violence. Housing prices need to come down. Hoarding housing needs to be massively disincentivized. We need to stop giving massive tax breaks to homeowners. None of this is popular but without major reform we're headed down a bad road. Canada is heading towards crisis at the moment and many of its problems can be tied directly back to soaring house prices. The consequences of high house prices are everywhere too. More expensive commercial real estate means businesses need to recoup that cost through higher prices.

switch007 2y ago
Totally agree. Same issues in the UK too. House prices are a cancer on society
bashmelek 2y ago
I’m glad to hear mention of roofing claims finally. I live in Florida, my insurance shot up. No claims, I live away from the water. I paid for my own roof. But a lot of people around me got free roofs, and I remember getting constant calls for “free roof inspections.”

_1tem 2y ago

Insurance is such a scam. Pay me money to cover your loss, except when I decide not to.

iandanforth 2y ago

As it's only tangentially mentioned in the article people should know that in many (most?) places insurers can't raise prices commensurate with risk making "nonrenewal" their only option. These regulations have reasonable origins because as a mandated product it's pretty tempting to price gouge, but there's no exception for circumstances where the price really should be 3x the historical cost.

infecto 2y ago
This is the massive failure that exists in many states. You are unable to raise rates but the risk has increased and premiums must increase. Both CA and FL are huge losers in this regard. Heavy regulation on rate increases but then happy to create underfunded state policies for their constituents.
- toomuchtodo 2y ago
  Root cause is that wages cannot sustain climate liabilities (insurance costs) that have been incurred by decades of fossil fuel strategy. People also can't afford to move, it is costly to build new housing due to labor and material costs. Bit of a death spiral all around.

tlogan 2y ago

The issue here has less to do with climate change itself and more to do with a combination of regulatory and economic factors. While left-leaning outlets might point to climate change as the primary cause, the reality is more nuanced—similar issues are visible in other sectors, such as health insurance. Here are a few key points to consider: - Insurance Company Consolidation: As the industry consolidates, large insurers gain the ability to strategically drop unprofitable market segments. This allows them to improve profitability, but it often leaves consumers in those markets with fewer or no options. - Regulations: Some states, like California, have introduced stringent requirements that compel insurers to continue providing coverage, even in high-risk areas. In response, many insurers have opted to exit these markets entirely. Consolidation has made this easier for them to implement at scale. - Lack of Investment in Disaster Prevention: Across both Democrat- and Republican-led states, we’ve seen a decline in state and federal spending on preventive measures for natural disasters. This shortfall exacerbates the risks insurers face, further disincentivizing them from operating in high-risk areas.

yodon 2y ago
> The issue here has less to do with climate change itself and more to do with a combination of regulatory and economic factors. The issue is not that the insurance regulations have tightened or changed. The issue is that the climate risks have heightened and the regulations have NOT changed to match the heightened climate risks. Small increases in average temperature of the air leads to large decreases in average moisture content of brush and vegetation, making fires more common and more likely to impact more homes. The insurers have the data, that's why they are acting the way they are. Fires are more common and fires are larger. Not politics. Actuarial data compiled by insurance companies. If you've spent any time with insurance CEOs, you'll know they are not bleeding heart liberals. They tend to be very conservative and very data driven. And they have the data and it impacts their business. The regulatory issue is that, to prevent historical forms of bad behavior on the part of insurers, state regulators require that insurers can only set pricing for fire insurance (for example) on the basis of historical data, not on the basis of forward-looking projections. That's the right thing for regulators to do in normal circumstances, when the risk environment isn't changing, but if the risk environment is changing it means you as an insurer will need to pay out money in the future at a higher rate than you did in the past, but you can only collect money based on lower historical payout rates. You are, in practice, required by the regulators to now offer your product at a loss not because the regulations changed but because the average daily temperature is increasing ever so slightly but just enough to significantly increase your cost. You don't want to offer a product at a loss, so you leave the market. As to why insurance is a regulated industry, in large part that's because insurance is one of the few products the government requires you to purchase, distorting the market, and also in large part because there are massive asymmetries of information between consumer and provider - insurance companies have much more information about risks than insurance customers do, which prior to regulation led to abusive practices on the part of the insurers, in ways that led voters to say "this is a problem that needs to be fixed." All big problems are hard, and insurance regulation is a big hard problem. If you just say "the environment is changing, so insurers should be able to set prices based on forward-looking projections" you help with the climate pricing increases but are likely to get other unrelated bad behavior at the same time (forward-looking projections are notoriously easy to fudge or fake in ways that are massively favorable to the person making the projections). If you don't allow for forward-looking projections, you lose insurers, if you do allow for it, you get abuses. "Just do it the right way" is much easier to demand in a blog post or comment thread than it is to deliver in legislation.

nojvek 2y ago

Meanwhile Desantis in Florida is spending $15M of taxpayer money to ensure books don’t say gay. That 100 or so trans folks in prison can’t access the bathroom of their choice or get healthcare they need. Millions spent on supposed woke war to show the Dems they are “anti-woke”. Senator Rick Scott who was caught with pants down embezzling billions in insurance fraud was voted again. Florida did this to themselves.

robocat 2y ago

I have a flood-prone coastal property (value a bit above median price for my city). Anyone have ideas on how to invest in other securities/properties to self-insure?