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Comment by jvanderbot | Hacker News Reader

Insurance is socialization of risk. It's much more cost efficient to socialize costs for infrequent bad events than it is to require anyone who might suffer said event to make themselves immune to it. The cost for making fireproof all homes that may burn is astronomical, as would be ensuring all homes could survive flood, tornado, hurricane, etc etc.

The adjustment in cost is simply facing the reality that more homes are burning nowadays. They pay for your flood insurance as much as you pay for their fire insurance, and their premiums are moving up faster than yours..

Today them, tomorrow you

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It's not that expensive, reinforced concrete with brick facade and metal roof is fireproof. I happen to know ICF costs 5-10% more than stick-built, so that's about the premium you should expect. But why would people bother when we have to bail them out?

What remains of a brick house after a forest fire is still not livable, is it actually much cheaper to rebuild than a wooden home?

Earthquake code

Your analogy is sound but your conclusion is not. There are many home owners that live by the shore that can’t purchase flood insurance from any provider. Similarly with life insurance, if I die engaging in certain risky behavior, it voids my insurance policy.

The purpose of insurance is to socialize losses. But if a few participants in the insurance pool engage in outsized risky behavior, that’s not fair to the rest of the pool that chose significantly less risky decisions.

The conclusion holds since there are a great many homes in CA alone that cannot be insured against fire. They were built before that was an option, or were otherwise grandfathered in after fire codes were established. Same with floods and other threats

Bricks are quite cheap, why they are used to build homes in developing countries. Metal roofs are available as well at a range of prices.

These 3 little pig arguments fall a bit flat to me.

You may have not seen what a forest fire, like those NorCal gets, does to a house. The insurance companies will have to pay just as much to replace a yard with some scorched brick in it where a family of four used to live, with their cars, possessions, appliances, etc. The house is ruined whether the walls survived the 1000 degree heat or not, because everything in and around it is lost.

Now there's certainly a class of old wooden houses on grasslands that are vulnerable to becoming infernos from stray sparks.

Assuming they weren't always that vulnerable (and that's what we're talking about here: new risk), I'm just not clear who would pay for it to be torn down and rebuild with (magical?) bricks. Did the homeowners have to do periodic risk assessments and decide when to do this? Who would pay for it? What's their motivation? They have insurance after all. They'll just rebuild.

If the insurance companies were caught off guard by this, how is a home owner to know and preemptively rebuild?

Areas around the house must be cleared as well. These are mitigations to reduce costs not cures.

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