Comment by Waterluvian

Something neat about the insurance industry is that it seems to be immune to irrationality. Whether or not someone believes in climate change, premiums are a function of actual measured risk. If risk goes up, premiums go up.

And because being accurate at assessing risk is directly connected to company performance, they’re likely one of the best places to go to get your finger on the pulse of what’s actually happening.

The one time this falls apart is when the government puts their finger on the scale and creates insurance that runs at a loss so that people can keep rebuilding in practically uninsurable locales.

I guess another nice thing about this is that the insurance company and you both have aligned incentives. Neither of you want to see claims being made. So they really care that you’re doing whatever you can to reduce risk.

I bet some of this is wrong, based on an incomplete read of the system, so please educate me. :)