Comment by danielmarkbruce
1 day ago
This is silly, and overcomplicating the issue. The world is very insurable, at a price. The property and casualty business is competitive as hell in almost all parts.
The government needs to just stay out of it.
1 day ago
This is silly, and overcomplicating the issue. The world is very insurable, at a price. The property and casualty business is competitive as hell in almost all parts.
The government needs to just stay out of it.
Ok, just play the next move. Insurance is expensive. Now what happens.
Can't think for yourself? This is econ 101. People will try to drive down the cost by:
1) Buying/building smaller houses that cost less to insure. 2) Building using different materials which are less prone to burn. 3) Moving to areas less prone to fires/hurricanes etc 4) Voting for representatives who take this more seriously and install better infrastructure to fight fires/floods.
These are all good ideas which haven't been put in place already because the government has distorted the insurance market so badly people aren't getting the right price signals.
> "The government needs to just stay out of it."
0) Elect people who claim they can make the voters' existing lifestyle affordable.
I agree that sometimes nothing or not very much is the best thing for the government to do, but a crisis is a very bad time to say that, because the other side will just claim they will fix things.
After all, deflation is not good, but claiming that you will bring down grocery prices does seem effective.
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People don't build wood houses in an area that gets wild fires
Probably they will, at one point maybe that banks wills stop financing it.
But only when you can't get mortgages, people will begin to stop, and even then some will continue.
It'll take a long time for these changes to trickle out. Especially, when real estate prices in LA are so high.
It might be faster to fix this with zoning. Or if the area is so desirable, find a way to engineer your way out of it.
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When the cost of premium surpasses what people are able to pay, companies will just leave. That's the point of the article, you can only ignore material reality for so long.
The companies are leaving because of mandated price caps from the government. In every other market when cost > price and they can't control cost, companies increase price.
You can only ignore the reality of government interference in the insurance market for so long.
I meant that at some point, with ever more costly and numerous disasters, the premium insurance companies would have to charge to be able to properly insure their clients would be too much for said clients to stomach, which would prevent anyone from getting anything insured. This has nothing to do with government interference. At some point the equation simply doesn't work anymore.
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