Is the world becoming uninsurable?
charleshughsmith.substack.com
charleshughsmith.substack.com
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.
Some buildings buy the coast (especially in port cities) and have steep rises anyway.
There is a huge threat of cultural loss - e.g. Venice.
But if you look in places like Florida, the ground conditions there are substantially more porous. If you try to keep the sea back there with a simple wall, it’ll just flow under the wall through the soil. You would have to dig all the way to bedrock and install some kind of impermeable barrier to prevent most of Florida from flooding due to sea level rise. Something that’s unbelievably cost prohibitive to do.
The Netherlands only exists below sea level because their ground conditions meant it was possible to pump out the country using technology available in the 1740s. If the ground conditions weren’t basically perfect for this kind of geo-engineering, the Netherlands simply wouldn’t exist as it does today.
You’re using an example that exists purely as a result of survivorship bias, as an argument that it’s practical to apply the same techniques or achieve the same outcomes anywhere else. Completely ignoring the fact that your example only exists because a unique set of geologic conditions made it possible, and those conditions are far from universal, and not in anyway correlated with places we humans would like to protect.
Of course they’re insurable at some premium. The question is whether there is any premium someone is willing to pay that can also cover the risk.
Floods, storms, droughts, fire? They appear to be getting worse.
More restrictive codes designed for better fireproofing buildings, for instance, can solve a number of problems in California in fire prone areas. Another thing that has a political solution is forest management. Lack of water can be solved by desalination, which becomes an energy problem rather than a water one. Very dry areas can benefit from solar panels because they reduce water loss from evaporation, thus reducing the pressure on water supplies.
It is expensive, but that's another problem.
What are you trying to say?
That said, there are literally hundreds of historic pre WGS84 ellipsoid|datum pairings, each with a somewhat different "survey map pole".
Historically geodectic poles have shifted as a function of datums.
The main point here, such as it is, was to poke at the infomation free aspect of "polar drift" as a comment .. which pole and what does that have to do with climate change? etc.
I'm not old enough to have seen Great Britain and relate isles pressed down by the weight of kilometres of ice though .. that'd be a great great great grand something that saw that.
Plate tectonics can result in some parts of the world moving at up 10cm a year, which over 10s to 100s of years can add up to something pretty significant. Funnily enough an OSM April Fools joke is a good place to learn more[1].
Talking of the UK. Ordinance survey still maintain their own master geodesics, and geographic references, which allows them to tie the OS grid (which what the land registry uses to locate property) back to WGS84, as both WGS84 and the UK slowly drift around due to various reasons (such as improved tech to refine the definition of WGS84, tectonic drift etc). You joke about the ice age and glaciers, but the UK is still “recovering” from all that ice, resulting in vertical movement of about 1m every 100 years. Which given how long property rights can last (Oxford University is almost 1000 years old), can actually turn into a material difference, and real land disputes, over time, if not properly corrected for.
Each of these adjustments may seem insignificant on their own, but they accumulate over time, and it gets complicated when these adjustments are forced to interact with humans, our somewhat fuzzy perception of reality, and general disregard for well defined coordinate systems which don’t align well with our “intuitive” understanding of the world.
None of this is any different to how we deal with issues that are thrown up by our increasing ability to measure time accurately. We track International Atomic Time (IAT), which is time as tracked by a set of atomic clocks, but then we apply various adjustments to get UTC, which is human time. Those adjustments exists purely to keep UTC aligned to what humans expect, because the earths orbit wobbles enough that the absolute time produced by IAT doesn’t match up perfectly with how we’ve historically measured time. All of this seems a little silly, but we now live in a world where everyday systems depend on measures accurate enough that all this minor drift becomes important.
Perhaps https://en.wikipedia.org/wiki/Cataclysmic_pole_shift_hypothe...
Climate risks are greater and more immediate than either comets or poles shifting.
Perhaps what should be more commonly accepted is that the US is a land of great natural beauty! And large tracts of it should be left to nature.
What's the average monthly leccy bill in Phoenix during the summer? $400?
Where does LA get most of its water? Local sources? I don't think that's the case.
New Orleans is a future Atlantis.
San Francisco is a city built by Monty Python. Don't build it there it'll fall down, but I built it anyway, and it fell down, so I built it again...
Japan comes to mind as a country that's solved this.
> Where does LA get most of its water? Local sources? I don't think that's the case.
Relevant: https://www.latimes.com/california/story/2025-01-10/as-flame...
https://www.preventionweb.net/news/not-drill-how-1985-disast...
The average high temperature in Phoenix in July is 106.5F (41.4C). If you are cooling to 70.0F (21.1C), that's a difference of 36.5F (20.3C).
The average January low in Berlin is 28.0F (-2.2C). If you are heating to 65.0F (18.3C), that's a difference of 37.0F (20.5C).
I feel like many people living in climates that don't require air conditioning have this view that it's fantastically inefficient and wasteful. Depending on how you are heating (e.g. if you are using a gas boiler), cooling can be significantly more efficient per degree of difference. Especially if you don't have to dehumidify the air, as in Phoenix.
So every human in your cold space is 80W fewer watts of energy you need to produce to heat the space. But in a hot space, it’s an extra 80W that needs to be removed.
Add to that all of the appliances in a home. It’s not unusual for a home to be drawing 100W of electricity just keep stuff powered on in standby, and that’s another 100W of “free” heating. All of this is before we get to big ticket items, like hobs, ovens, water heaters etc.
So cooling a living space is always more costly than heating a living space. Simply because all the waste energy created by people living in the space reduces the total heating requirement of the space, but equally increases the cooling requirement of that same space.
All of this is ignoring the fact that it’s easy to create a tiny personal heated environment around an individual (it’s called a woolly jumper). But practically impossible to create a cool individual environment around a person. So in cold spaces you don’t have to heat everything up to same temperature for the space to be perfectly liveable, but when cooling a space, you have to cool everything, regardless of if it’ll impact the comfort of the occupants.
https://weatherspark.com/y/75981/Average-Weather-in-Berlin-G...
https://weatherspark.com/y/2460/Average-Weather-in-Phoenix-A...
For each day, use the average high and the average low. Subtract the desired maximum dwelling temperature from the average high: if the result is positive, add it to the cooling degree-days total. Subtract the average low from the from the minimum dwelling temperature: if the result is positive, add it to the heating degree-days total.
Over a year, that gives you comparable figures on how much you will need to cool or heat the space. Many agencies calculate this for specific areas.
Here, for example, are the current season numbers for Boston: https://www.massenergymarketers.org/resources/degree-days/bo...
Generic regional numbers for the US: https://www.eia.gov/energyexplained/units-and-calculators/de...
This is your most accurate/relevant point:
> All of this is ignoring the fact that it’s easy to create a tiny personal heated environment around an individual (it’s called a woolly jumper).
Whereas this is plainly wrong:
> It’s much easier, and consumes less additional energy, to heat an occupied space, than to cool it.
And then the following is correct but the marginal reduction in load is minimal except in relatively crowded spaces (or spaces with very high equipment power densities):
> Thanks to the fact that your average human produces 80W of heat just to stay alive.
The truth is it is generally easier to cool not heat when you take into account the necessary energy input to achieve the desired action on the psychrometric chart, assuming by “ease” you mean energy (or emissions) used, given that you are operating over a large volume of air - which does align with your point about the jumper to be fair!
Generally speaking, an A/C uses approx. 1 unit of electricity for every 3 units of cooling that it produces since it uses heat transfer rather than heat generation (simplified ELI5). It is only spending energy to move heat, not make it. On the other hand, a boiler or furnace or resistance heat system generally uses around 1 unit of input energy for every 0.8-0.9 units of heating energy produced. Heat pumps achieve similar to coefficients of performance as A/Cs, because they are effectively just A/Cs operating in reverse.
Your point about a jumper is great, but there are local cooling strategies as well (tho not as effective), eg using a fan or an adiabatic cooling device (eg a mister in a hot dry climate).
> So cooling a living space is always more costly than heating a living space.
Once you move to cost, it now also depends on your fuel prices, not just your demand and system type. For instance, in America, nat gas is so cheap, that even with its inefficiencies relative to a heat pump, if electricity is expensive heating might still be cheaper than cooling per unit of thermal demand (this is true for instance in MA, since electricity is often 3x the price of NG). On the other hand, if elec is less than 3x the cost of nat gas, then cooling is probably cheaper than heating per unit of demand, assuming you use natural gas for your heating system.
> Generally speaking, an A/C uses approx. 1 unit of electricity for every 3 units of cooling that it produces since it uses heat transfer rather than heat generation
You know you can use a heatpump to heat a space as well right? Then you get to move 3 units of heat into the space, plus you also get to use that extra unit energy used to power the heatpump, because the heatpump turns the unit of energy into waste heat! (After all energy can’t be destroyed, so it has to go somewhere).
I thought any place that is significantly cold can still dig underground and at some point you can get enough heat to run your heat pump?
Some people on reddit are reporting quotes of 125k for larger (>3000 sq ft) houses.
As someone who lives in a 4-season environment that can get down into the single digits F on occasion in the winter (forecast to be there for a couple of days next week), and has an air-source heat pump, I just suck it up and eat the $400-$500/month heating costs for the auxiliary (electric resistive) heat in Dec/Jan/Feb. If someone gifts me a ground-sourced heat pump I'll gladly accept, but I've got kids to raise so setting aside money for one is a long way off.
Insulation obviously also helps keep a place cool. But no amount of insulation will ever remove the need for cooling if the outside is warmer than the inside. Energy is always going to move from a hot place to a cold place, but at least insulation lets us control how quickly that happens.
Also the limit on air sourced heat pumps in cold conditions is basically caused by water freezing on the evaporator coils, effectively adding a layer of insulation that limits how much energy can be drawn from the air, we’re not really limited by the refrigerants. As other have mentioned you dig down to find a better source of heat, and often you don’t even need to dig far, a 20-30cm trench is often enough. Although in super cold climates you’ll need to go deeper to make sure your through the frost layer in the winter.
This simply is not true for a furnace or electric resistive heat.
My furnace produces 0.9W of heat for every 1W of energy input. More efficient ones do 0.98, the best you get with electric resistive heat is 1W.
On the other hand my air conditioner moves 3.5W of heat outside for every 1W of energy input.
So you are spot on, in winter temperature deltas are larger, and efficiency goes up.
https://backend.daikincomfort.com/docs/default-source/produc...
There are multiple relevant temperatures for a heat pump, and the pump is more efficient when some of those are higher and some lower. A heat pump has two heat exchangers, one on the inside of the building and one outside. Each of those heat exchangers has two temperatures: the refrigerant loop temperature at that point, and the ambient temperature (air for air source heat pumps, ground for ground source heat pumps). There's also a fifth relevant temperature that has indirect influence: the setpoint (the desired indoor ambient temperature).
Efficiency increases when the temperature delta between the refrigerant and ambient temperatures is higher (both indoor and outdoor). But those temperature deltas vary inversely with the delta between the indoor and outdoor ambient temperatures.
So, in summary:
- Heat pumps get less efficient when the temperature delta between indoor and outdoor temperature is higher.
- They get more efficient when the temperature delta between refrigerant and ambient temperature is higher.
The net effect of this is that heat pumps become less efficient as the temperature becomes hotter outside in the summer and colder outside in the winter.
You can also think about it as far as actually moving heat. Cold is the absence of heat, and so when the air is colder, there is less heat moved for the same effort and you have to work harder -- less efficiently -- for the same amount of head to get moved.
> plural in form but singular or plural in construction
(https://www.merriam-webster.com/dictionary/thermodynamics)
I think American and British English treat words like this differently.
I assume you mean that 10% of the energy immediately escapes your house?
A living space will naturally heat itself with zero furnaces or electric heaters. Because the living things inside it will always produce heat (at least until they cease to be living). On the other hand, you’ll have a hard time getting living things to cool any space they occupy.
> On the other hand my air conditioner moves 3.5W of heat outside for every 1W of energy input.
Heat pumps work both ways, and it’s still easier to heat a space with a heat pump than cool it. Sure your AC can move 3.5W of heat for 1W of energy input. But that means 1W of energy allows you to remove 3.5W of heat from a space. But if you used the heat pump to heat the space, you would get 4.5W of additional heat, because that 1W of energy used to power the heat pump becomes waste heat that can be trivially captured and used to heat the space.
* In cold weather, solar heat gain can work in your favor as well. Much of the effect will depend on the orientation, shading, and properties of your windows, though. On the other hand, as another commenter pointed out, more sun in southern, cooling-dominated climate can also mean more, cheaper electricity.
* If you have a heat pump water heater, it will actually _cool_ your space significantly. The heat is transferred from your home to your water and mostly goes down the drain with it.
* At 65F (18.3C), most people I know would already be wearing a jumper/sweater. That's why I chose a lower target temperature for Berlin. The best source I could find[1] indicates that in November-December of 2022 (in the context of rising energy prices due to Russia's war with Ukraine), Germans actually kept their houses at 19.4C, on average.
* Maybe I'm moving the goalposts a bit, but I chose Berlin mostly because the numbers worked out conveniently. As someone who grew up in the American upper midwest, I wouldn't consider Berlin to be particularly cold. Phoenix, on the other hand, is the hottest city in the country and its summers are some of the hottest in the world. In general, the hottest cities are still closer to what we'd consider room temperature than the coldest are.
[1] https://www.cleanenergywire.org/news/80-percent-german-house... (original report is on German)
On the other hand, depending on the humidity, heats over like 85F start becoming a health risk for some activities.
In a cold environment, you can just take that energy from outside. If you’ve got a heatpump, then you can always set it up make sure that waste heat produced can be used to heat a space, and make sure that it’s always scavenging energy from a place you either want to keep cool, or from outside.
> Phoenix, on the other hand, is the hottest city in the country and its summers are some of the hottest in the world. In general, the hottest cities are still closer to what we'd consider room temperature than the coldest are.
If we’re talking survivable environments here, then phoenix isn’t a good choice. Places like Delhi are better where not only are the temps high, but so is the humidity. At times hot enough and humidity enough that the wet bulb temperature rises higher than human survivable conditions, in which case, without heat pumps, it’s literally impossible for humans to survive more than a few hours.
https://www.independent.co.uk/climate-change/news/wet-bulb-t...
Nope. That's precisely wrong. Tl;dr heating normally uses less efficient technology than cooling and has to work across a higher temperature difference.
In Alberta or Minnesota, where the delta in the winter can be as high as 60 degrees centigrade (-40 outside, +20 inside) but only 20 degrees centigrade at most in the summer (+45 outside, +25 inside), heating is far more costly. Even accounting for waste heat from appliances. Most heating is done with furnaces, not heat pumps. Air conditioners are heat pumps and are 3x as efficient as a furnace. There are also less energy intensive cooling methods - shading, fans, swamp coolers - commonly used in the developing world and continental Europe.
On the other hand in a place with warm winters and hot summers, such as south east Asia, obviously cooling is more expensive because heating is unnecessary.
The highest temperature ever recorded is around 60 degrees centrigrade, a mere 23 degrees above the human body. The low temperature record is like -90, 127 degrees below body temperature. Needing to heat large deltas is way more common than needing to cool high deltas. And cooling is done with heat pumps, which are more efficient than the technologies used most commonly for heating (resistive or combustion).
> when cooling a space, you have to cool everything, regardless of if it’ll impact the comfort of the occupants.
Keep the house at 25 degrees centigrade and run a ceiling fan. 23 if you're a multi-millionaire. You'll be far more comfortable outdoors if your house is closer to the outside temperature. The North American need to have sub-arctic temperatures in every air conditioned space in the summertime is bizarre (don't even get me started on ice water).
That’s moving the goal posts. You can always use a heatpump to heat a space.
Any space you want to keep comfortable will always be easier if the outside is cooler than your target temperature. Everything in that space is going to produce heat as a natural consequence of expending energy into any form. It’s always possible to add insulation to minimise the amount of energy you loose into the surrounding environment, and you can always modulate how much additional energy you let escape using a simple opening in that insulation.
On the other hand, if the external space is hotter, then you must always expend additional energy to move waste heat energy accumulating in the space into the high energy space outside. There is no passive manner that can allow you to cool a space surrounded by a hotter space, you’re always fighting against the temperature gradient. And if you want your living, heat producing, organisms to keep living, then you need to get rid of the heat they produce.
I covered that in the rest of my post. Most of the time, heating involves a much bigger temperature gradient than cooling. And even though you can use a heat pump, most houses don't use one. (I love the tech personally). Meanwhile cooling always uses a heat pump, so almost every air-conditioned house is using more efficient tech than a heated house. While operating on a smaller temperature delta.
> There is no passive manner that can allow you to cool a space surrounded by a hotter space
Insulation works just as well to keep heat out as it does to keep heat in.
Also in sunny climates it's easy to use solar energy for cooling making it carbon net-zero. Cold places typically burn natural gas for heating, it's much harder to make heating carbon net-zero.
In a cooling scenario, all waste heat is just that, waste. But in a heating scenario, waste heat isn’t waste, it’s additional heat you can use, and reduces the total amount of energy you need to inject into the system.
Insulation makes the house more resistance to temperature change (relative to the inside and outside).
One thing people forget is the delta is very different in the summer and winter. Lets say your thermostat is on 70 year round. If it is 100 degrees out you only have to cool 30 degrees. When it is 0 F out you have a delta of 70 degrees. So for this scenario, expect to use more energy in the winter.
there are whole important cultural lifeways related to opening and closing windows at proper times for efficient cooling and ventilation. these work really well — in Europe — and are treasured traditions.
getting people to accept AC is sort of like trying to convince the average American to go grocery shopping on a bicycle. some may accept the idea but only the most European influenced already.
Phoenix is a slow-rolling disaster regardless of whether it's easier to heat or cool a room to comfort.
Lisbon was destroyed by an earthquake/tsunami/firestorm combo in 1755 that killed tens of thousands.
When the city was rebuilt, they came up with the idea of using a wooden frame structure for earthquake resistance and masonry walls for fire resistance.
Nowadays, most new buildings seem to use reinforced concrete.
I wonder if American children are taught the story of the three little pigs.
The root comment is based on a very dated concept. Of course we can built earthquake resistant megastructures from steel and concrete. A lot of that building technology was created in California. It's either naive or willfully ignorant to think we can't solve this problem.
The issue with those materials is cost. Spread out, suburban design without density is expensive and wood frame construction is a great way to affordably build housing. Wood frame single family houses are not the problem - it's how we design our cities that's the problem.
We make single-level houses with a reinforced concrete structure, because it's cheap.
You know what isn't cheap? Wood. Wood is incredibly expensive to put into a shape, even if you are willing to cut forests down to get it.
There's something distorting your economy. Concrete is incredibly cheap as a material, extremely prone to use in a large supply chain, and requires way less labor than wood.
You make houses siting over finely built wood lattices... how much do you pay to the people building those? Because I can't imagine it being justifiable with Brazilian salaries.
The low cost of lumber is one of many things in America that don't make sense economically, but that persist because of momentum, with each generation receiving an inferior facsimile of what the previous ones knew. See also: car-centric policy (from infrastructure to gas prices) and retirement planning (pensions to IRAs to nothing).
The largest share of the illegal wood extracted from Brazil goes to the US.
What is not to say that most of the wood in the US is illegal. It's probably a small share. But some of your houses do pretty much chop forests down. (And your government does help fight that, but it's hard to completely stop it.)
The problem is that our government has spent ~100 years ensuring that corporations have easier and cheaper access to it so that they can grow feed for farm animals to sell overseas, largely to places like UAE that have sufficiently depleted their own water table as to make it impossible to grow alfalfa, thus worsening the risk of droughts for the sole benefit of the shareholders of these corporations.
Every gov't agency in the US needs to start treating our natural resources as if they belong to all the citizens of the country and not a select few shareholders of whichever corporation can earn the most money by exploiting them.
When European descendants started colonizing that part of the world they treated all the resources as free for the taking. You went into nature, developed some land for agriculture, and it became yours by right. The same with the water. It was essentially homesteading.
So water was treated as property the same way the land was. Whoever used it first, owned it. Leaving out the natives because apparently nobody cared about them, it made sense.
How we fix it now within that legal framework is the question.
Then there's the question of where to move them to. Between wildfires, hurricanes, and earthquakes you've eliminated most of the coasts. Much of the rest of the country defines its identity to a significant degree as being opposed to cosmopolitan cities. That doesn't leave a lot of places to move to even if we could just move the cities.
It looks like it's a reinsurance program:
https://www.mof.go.jp/english/policy/financial_system/earthq...
So, I think the answer is "no".
If there's earthquake insurance in japan, it should be do-able.
"In and around Japan, one-tenth of earthquakes in the world occur. " https://geoscienceletters.springeropen.com/articles/10.1186/...
Average home age in Japan is 30 years. I think, maybe once or twice, I’ve lived in a building less than 30 years old in the US. I’ve spent most of my life in buildings built pre-war. There aren’t so many pre-war buildings in Japan, but the US takes the blame for that one :-(
If a country with 1/10th of the worlds seismic activity can have (earthquake) insurance, then well dammit, I think it can be done.
Insurance, afaict, is just gambling, and well darnit you can gamble on anything.
The odds might be terrible, but there's ways of hedging your bets I've heard.
I am not a gambler.
They're also smaller, which makes construction costs cheaper which means people are more likely to make dramatic changes when fashion changes. And then there's more of a culture of prefab house building rather than extensions etc. Planning is also a lot more liberal which allows the rebuilt house to be more different and also reduces the cost of the process.
I think even in Europe some of the older houses are houses of theseus though. The exterior shell is the same, but there's plenty of buildings in the local city centre that were tenements, then small business offices, then apartments, with significant remodeling that occurred. Or the house I used to live in was built in the 1880s, extended in the 1950s and significantly modernised in the 2000s. Each time there would have involved largely gutting the interior and rebuilding.
I've always treated cars like houses are in the USA- I buy an older higher end car like a Porsche, keep it in perfect shape, and expect it to appreciate- and it does. Most cars I've owned I ultimately sold for much more than I paid. I've never understood why anyone would waste money on a depreciating car, especially when a fully depreciated high end car is so much nicer and cheaper than a low end new one. Airplanes are not mechanically that different than a car, yet generally last and hold value if maintained.
I've also never understood why people in the USA assume houses will always appreciate, as if it is a law of nature or something- when at its core houses can't appreciate forever relative to inflation, because there is a hard cap somewhere below people paying 100% of income for housing. This basically proves it is just a combination of a culture that values older housing in the USA and regulatory capture preventing new construction. New houses are often seen as "cold," "sterile," or "lacking character" in the USA- and the stereotype of a successful wealthy person is in a giant old mansion.
When you build you civilization on active volcanoes having long-lasting buildings may not be a reasonable assumption.
And, yes!, they have insurance. So if you can insure buildings in volcano country, you can insure anything, anywhere, maybe?
I read those arguments of the advantages this method has, especially financial ones, but to me it's nonsense considering that it would prevent an endless number of problems that cause the total loss.
I still remember when New Orleans was hit with by Katrina, large parts of the suburbs where houses where made by wood and plastic where destroyed, yet downtown where buildings where made of bricks required maintenance, sometimes little of it, but none faced a total loss.
Newer multistory is typically cast in place with rebar reinforcement from what I can tell.
In the countryside, you might find more masonry block construction, but not in dense urban areas like Taipei and Taichung where the norm is to build up. Most "single family homes" are what we would consider very large condos in the US.
There’s a lot of historical context to understand here. The neighborhood that just burned down in the Eaton fire (Altadena), was built up by African Americans and Latinos who were redlined out of Pasadena even after desegregation. Some of them built their houses on land that they bought for under $100 in the 1950s and 60s. They wouldn’t have been able to afford the kind of construction they’d need to be both earthquake and fire resistant. Their choice was between owning an old tinderbox or renting from slumlords.
Brick also isn’t some magical building material that solves all your problems without drawbacks. Wood isn’t some evil building material that creates a bunch of problems without benefits.
Engineering is always a set of trade-offs.
It's normal nobody wants to insure such risky assets, especially as nominal value of this wooden crap is stellar due to the skewed demand/offer ratio plaguing good parts of US.
In my life I've seen my and my family's real estate being hit by a tree, fire, floodings and I've never had to face anything close to a total loss.
Huge expenses? Sure. But never anything close to a loss.
The only thing that could put my real estate on a serious risk are earthquakes, I guess that's a scenario where lighter built houses would have instead an advantage.
The options are either pay more for this one thing than literally any other possession you or anyone you know will ever own, or live in a tent or worse.
I feel like criticizing people for pragmatism in the face of (literally) existential threats is some kind of next-level privilege.
Despite the news coverage, fires are extremely rare but nearly every home in these areas is guaranteed to face multiple massive earthquakes that would bring down a brick building.
Earthquake resistant constructions made of stones have been known for centuries by the incas and probably other civilizations without having building entirely made of wood, why can't californians?
Wood is extremely cheap, and extremely earthquake resistant… it is an appropriate material for the area despite a slightly higher fire risk.
You can also look at some states like Chiapas in Mexico. There are daily earthquakes in Tuxla. Last 8.2 was in 2017 in Tapachula. They typically live in small building made of mud bricks and stones. https://earthquakelist.org/mexico/chiapas/#all-latest-earthq...
Plus, I and most people wouldn't personally want to buy a any type of stone or brick house- it would take a lot of evidence to convince me it was earthquake safe, and I'm not sure how one could produce such evidence. Resale value and demand would be very low for something unusual.
Wood houses in practice aren't a big problem. There is something like a 3% chance per century of a wood house burning down in California, and almost all of those are centered on specific locations that are known to be very high risk and can be avoided if desired.
In most cases you would escape safely and be covered by insurance (neither of which would be the case with a stone house in an earthquake). In California almost everyone has fire insurance, almost nobody can get earthquake insurance. Probably if a stone house was in a large fire, it would still be burned to bare walls and still be as unlivable and expensive to rebuild.
For reference, to make a non-sinking, heavy building in Florida you have to drill down into the limestone layer which is usually 100+ feet below the surface. Then you have to create very strong concrete caissons to hold the building up, standing on that limestone layer. It's very similar to if you were to build a structure out into the ocean (LOL).
Same for eg. gas explosions, this is one one looks like in us:
https://media.cnn.com/api/v1/images/stellar/prod/23081219122...
And this is one over here:
https://www.prlekija-on.net/uploaded/2018_11/eksplozija-plin...
Same for eg floods, pump the basements and ground levels, repaint, move stuff back in. Someone from US I work with on a project had a pipe burst while on vacation, and insurance wrote off their whole house, because of a few days of water.
I mean, sure, you could that, but looking at the photos from fire-affected areas, nobody did that, it's all burnt to the ground.
It's not just gas explosion, it's 'everything', fire, structural rigidity (only ground floor houses are rare, almost non existant here), and well.. they're built to last.
https://www.metropolitan.si/kronika/tovornjak-trcil-v-hiso-s... <- a truck hit a building, and old one, and you can see the damage... one wall. The girl in the room survived.
I mean... again.. you could build a home that is "fire resistant", and we do, but most americans don't, as we see in LA.
That is actually how pretty much all new houses in the UK are constructed. They are pre-fabbed timber frames with a brick facade. It's quite common for British people to be snobby about building materials. I wonder how many don't realise their house is timber framed.
This claim struck me as unlikely, so I did a quick fact check.
Accroding to the most recent report I could find[1]: "Figures from the National House Building (NHBC) suggest that timber frame market share has developed from 19% in 2015 to 22% in 2021 and that market conditions, as described above, present the opportunity for this to develop to circa 27% by the end of the forecast period (2025)"
This appears to be driven by Scotland where 92% of new builds were timber framed in 2019, while in England (where the majority of new houses are built) it was just 9%.
[1] https://members.structuraltimber.co.uk/assets/library/stamar...
Here in the seismically stable UK, we had problems with fire spreading in urban areas [1] in 1666. So we banned wood exteriors on buildings. It works pretty well if you don't need to worry about earthquakes or hurricanes; brick doesn't burn.
This lesson is taught in history classes to 10 year olds, and they don't tend to go into other countries' construction traditions, or reasons not to use bricks.
There are two main ways to build a house out of wood. You can go for stick-built construction or timber framing. Homes in the US were mostly timber framed until the early 1900s. Advancements in tools and manufacturing techniques has resulted in stick-built homes becoming dominant in the US since then.
If you search for “stick-built” you’ll see pictures and encyclopedia articles describing it. The basic idea is that you take standard dimensional lumber (like 2x4s), bring it onto the site, and assemble it into the frame for the house. Timber construction uses larger pieces of timber to make the house.
I’m not an expert but it seems to me that stick-built construction took over the country because of advancements in fasteners. If you tried to make a stick-built house in the 1800s it would fall apart, but this is the 2000s, and they make a million of them every year.
The availability of engineered wood products like plywood is a big part of it too. Being able to attach what's effectively a solid sheet of wood to a wall adds a ton of shearing strength, for example. (And that's without getting into fancy modern engineered wood products like parallel-strand lumber or glulam, which give you something even better than raw wood.)
I don't think the US has enough seismic activity to be much different. Chile and Japan do fine with solid construction and periodic 6-8 Richter earthquakes. California is allegedly a seismic state within the USA and it rarely sees a 4 degree one, and when it happens it makes it to the US national news (and sometimes even to the news back home, but as a comedy break because people don't even think about getting out of bed if it's not a 6).
I'm not sure about hurricanes, but maintenance can't be much different as rotten wood and moldy bricks are both a problem. Maybe insulating bricks is more expensive?
> This lesson is taught in history classes to 10 year olds, and they don't tend to go into other countries' construction traditions, or reasons not to use bricks.
Cultural differences don't help here, in the US people think about rebuilding homes way more often than people in Europe, so there's this mindset that the home doesn't need to last that long because it will be rebuilt anyways. This shorter life span, "freedom" and profits thanks to lower costs also call for little regulation that forces the building code to aim to survive the regional disasters from the past 60+ years. California's fire code is probably an outlier, but SF had to burn down for the regulation to come out.
The entire western third of the US is has several M7+ earthquakes per century, with a M6 every couple years, and the occasional M8-9+. The 1964 Anchorage earthquake was stronger (M9.2) than the 2011 Japanese earthquake that caused the great tsunami.
In the eastern US, there is a giant seismic zone that had multiple M8+ earthquakes in the 19th century. These were so powerful they changed the path of the mighty Mississippi River. People forget about it because it hasn’t had a large earthquake in over a century.
A lot of R&D is done on new construction techniques for extreme earthquake risks. The challenge with reinforced concrete is the absurd amount of reinforcement and steel you need to make it survive an earthquake that strong, which makes construction slow and expensive. The state-of-the-art doesn’t use reinforced concrete at all, even in skyscrapers; they use specially designed welded steel plates and fill the empty spaces with poured concrete.
The US has an anomalously high exposure to natural disasters as an accident of geography. For example, people often forget just how many active volcanoes there are in the US, including multiple super-volcanoes. While I live in an area well-known for its M9+ earthquake and tsunami risk, I can see three active volcanoes from my kitchen window.
Right, Europe has little seismic activity, so the rare 4M_W earthquake takes down random 400yo buildings easily. My point was that building with bricks was not a problem, Japan and Chile build houses and skyscrapers just fine.
> I think you underestimate the frequency, strength, and geographic distribution of strong earthquakes in the US
Sir, I'm from Chile. Beyond earthquakes in Alaska the US is no match, and that land it's not even close to the US. I promise you the Danish construction code has not been heavily influenced by Greenland.
If you wanted to make fun of building practices it would probably be the trend of plastic siding.
It's not a big leap to go from complaining about the furniture and the walls being made from what seems like highly compressed dust to also complaining that underneath it all is a bunch of sticks.
It so often feels like a house of cards.
Europeans are jealous that they clearcut all their forests 1000 years ago and want to brag up their cinderblock homes that no one can actually afford to buy anymore. 40% down on their 50 year mortgages yadda yadda.
Insulation plays into combustability as well, where mineral / rock wool has thermal mass, does not ignite, but us construction has recently favored fiberglass and cellulose for the the costs.
I am thankful to live in a county where land and building ownership are more available to the common man than most and many people can escape being perpetual renters. Wood construction enables that. Plus North Americans love to adjust and remodel their homes and have unique shapes with high ceilings etc etc etc which is really helped with our construction techniques. The only thing I hate is termite risk and that could probably be resolved by allowing framing with pressure treated wood
I’m sure when homes are rebuilt the majority will not be fire resistant.
It’s possible to build for hurricanes and floods too but few do it. They build houses that get blown away and then tap insurance.
Insurance rates for properties not built to withstand the stresses of their environment will go up.
https://www.fema.gov/sites/default/files/documents/fema_mars...
They are required to be: https://heatmap.news/climate/california-wildfire-building-co...
The problem is that in many desirable places to live in California, many houses are very old and are not compliant with the latest building codes.
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.
In the US, manual labor is very expensive, home construction or repair is highly regulated and requires permits and multiple inspections from the local government, and the amount of flood-destroyable stuff - material possessions, furnishings, appliances - in a typical home is massive. As a result, a cyclone which a poorer country would survive with a shrug in the US becomes an extremely expensive disaster.
And certainly as it relates to insurance, the trend sure seems to be well on it's way towards "coastal Florida is insurable" (either the price goes up beyond the means of the residents, or the insurers leave the market). Something like 5% of the state is covered by Citizen's Property (the government insurer of last-resort). Some coastal areas are ~10%. I have to imagine it won't be long before it's cheaper to pay people to move elsewhere than rebuild where they are.
the issue for Florida is that the state is made of permeable limestone, so it’s not possible to engineer around sea level rise. not so much an insurance issue exactly though, because it’s not a one-off disaster.
Take Katrina from my friends and family living in New Orleans, you’ll find city streets where none of the houses go significantly damaged. They lost power long enough you don’t want to open the fridge, but most of the city was fine in the hardest hit city from one of the most expensive storms on record.
https://en.wikipedia.org/wiki/Reconstruction_of_New_Orleans
Not sure how that is a "tiny fraction" of homes. $125 billion in damage (2005).
The issue is most to the city only sustained water damage, a solid chunk of the city is above the water level and was absolutely fine. Moving outside the city most homes in Louisiana, Texas, Alabama etc don’t need to worry about flooding.
In most of South Florida basically anything left standing is pretty well built to withstand hurricanes.
A category 1 storm hitting NYC or North Carolina is an unbelievable disaster. A category 1 storm hitting Broward County is usually disruptive to everyday life but that’s it.
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.
Compare some incidents with, Hurricane Sandy, for example, where it traveled across the span of a thousand miles and lasted a week of damages.
Tornadoes seem like a phenomenon for which insurance is actually a pretty good part of the solution. I mean, it is very unlikely for anything in particular to get hit by a tornado, but it is really devastating. It might take an unreasonable amount of work to build everything to the level where it can sustain a direct hit by a tornado. The expected value of tornado damage is quite low overall, we just need to deal with the individual catastrophes that occur.
Hurricanes… I mean, there are different sized hurricanes in different areas. For the ones that hit Florida, part of the solution is probably legitimately that we should have fewer people living there, because there’s going to be a widespread devastation there occasionally. And if you live in a hurricane-prone area, you are going to get hit by one eventually. (So like what’s the bet here? The insurance company knows they’ll probably have to pay out eventually).
Just to put a number to it, 2024 was apparently an unusually busy year for tornadoes, around $6B. That isn’t nothing! But one single hurricane cost $7B in 2024… and there was a $34B one… and a $79B one… who’s insuring the southern coast of the US? Seems rough.
The same goes for floods. Most of the problem with floods, is that the house frame and flooring are made of wood. And wood rots. If you live in a flood prone area, the first floor at least, should be brick or stone for just about everything. Yes its expensive. But so is is $800/month flood insurance. Or having the federal government bail you out and passing the cost on to the taxpayer
But building things correctly is more expensive, and Americans love their cheap McMansions.
Also, on an individual level there is less incentive to build correctly, because you will almost certainly not get a discount on insurance. 99% of the population is at the whim of either buying a used house, or whatever the builder's models are for new construction. Its really only possible if you are very wealthy and build your own house on your own plot.
I’m not sure how Florida or Louisiana would deal with flooding though, they simply have nowhere for the water to go. They would have to basically pump and store it above ground somehow. It might make sense to re-level their cities with an artificial ground level a few stories above sea level.
But the problem, now that these giant things exist, is that they aren’t the panacea they were thought to be. Large storms of today’s era are dumping too much water in too short an amount of time. You just can’t build big enough.
I couldn't find data for tornadoes in aggregate, only individual storms.
> Economically, tornadoes cause about a tenth as much damage per year, on average, as hurricanes. Hurricanes tend to cause much more overall destruction than tornadoes because of their much larger size, longer duration and their greater variety of ways to damage property. The destructive core in hurricanes can be tens of miles across, last many hours and damage structures through storm surge and rainfall-caused flooding, as well as from wind. Tornadoes, in contrast, tend to be a few hundred yards in diameter, last for minutes and primarily cause damage from their extreme winds
https://www.americangeosciences.org/critical-issues/faq/how-...
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.
This is important. Insurance was invented 2000+ years ago but aggressively deploying technology that worsens floods, weather, and fires is only around ~100.
Or build something adapted to the risk it faces. In my home town there are houses that were built on flood plains that have recently been flooding every 5 years or so. Luckily they are brick and in order to get these covered you now need to install flood barriers over the doors, and your ground floor has to be adapted to flood without sustaining damage (tile floors, special plaster etc.)
Now when we have a severe flood warning people will move their valuables upstairs if they're house floods they just have to clean out the mud. There are also a couple new houses right next to the river that float and rise and fall on stilts when the banks burst.
Insurance is based on statistics. The math they use assumes stationary distributions. Insurance companies can't deal with shifting distributions well so they take the losses and then exit markets.
Global warming is going to mess up insurance as we know it for that reason. Not sure property insurance, but all kinds of insurance.
Most disasters follow power laws and other fat tail which don't have the same effects in the tail as a Gaussian. If you shift 1/x^a by c, you "only" get a polynomial increase.
But also, if you shift the mean of a Gaussian, the increase isn't exponential, it's super exponential (e^(x^2) to be specific).
> Insurance is based on statistics. The math they use assumes stationary distributions. Insurance companies can't deal with shifting distributions well so they take the losses and then exit markets.
Sure they can, that's why they hire statisticians. They routinely deal with insurance of much rarer events where we have much worse models than climate change. They're just banned from charging the actual rates, because it's politically unacceptable.
A lot of the responsibility falls upon governments who are lobbied by developers to zone areas for development that should never have been zoned for development in the first place.
Frankly, I think it's about half to both factors.
The Tornado Archive (https://tornadoarchive.com/) has a pretty well executed map to illustrate that. They report that between 2011 and 2021 (just the dates I punched in, so its possible the actual ratio is a bit different from that), the world saw ~20,000 reported tornadoes. North America reported 12,000 of them.
So its not just that Americans maybe don't know how to build tornado resistant structures. Its that the US and Canada's per-capita tornado rate is quite a bit higher than the rest of the world.
I suspect that a major factor is that the great plains of North America are at a lower latitude than e.g. the Eurasian steppes, so 1) there are fewer people living there and 2) the confluence of meteorological circumstances needed to generate a lot of tornadoes (and therefore a larger population of very destructive tornadoes) just aren't present anywhere else in the world.
This whole line of reasoning "Americans must be bad at house construction, look at all the destruction wrought by hurricanes/tornadoes/etc" just feels disingenuous to me. Like observing "look at how much better the British are at building volcano/earthquake proof buildings, you never hear about people losing their houses to lave in the UK!".
This is in fact a huge part of our tornado risk in the US. The long north-south region of mountainous/high elevation (i.e. the rockies) going into a large low elevation flat region, helps create the 'layering' of different air temperatures that cause tornadoes once the current changes enough for the top/bottom layer to turn into a column.
> albeit delivered more slowly.
> those kinds of forces.
Tornados are very powerful, but if you deliver the same amount of energy over a longer time frame, the forces go down accordingly.
On the other hand, tornados do damage on a relatively smaller path. That may mean they’re as destructive as a nuclear bomb, but within a much smaller affected area.
The insurance companies have done research on the topic (including building giant 'labs' with a large number of fans)
* https://fortifiedhome.org/research/
and have developed standards/techniques that home builders/owners can do to fix a bunch of problems, starting with roofing:
* https://fortifiedhome.org/wp-content/uploads/2020-FORTIFIED-...
Ofc, a sufficiently strong Tornado is destroying everything in its wake. But, they're rare in comparison.
What do you mean by this?
> [...] immune to flooding because they allocate the ground floor to parking.
But tornados are also significantly smaller. A hurricane will damage a thousand square miles while a hurricane will mess up 50. It’s not quite right but the proportions are in that ballpark.
My family lives in Vero Beach and their house and entire street got hit by a tornado.
Vero was hit by 6 during the last hurricane.
“Experts say the insurance landscape in California is particularly tricky because, in addition to the wildfire risk, the state has a law that adds extra approval measures, including board approval and review by the insurance commissioner, if an insurance company wants to raise the rate of insurance by more than 7%. That’s been in effect since the 1980s.” https://www.cnbc.com/2024/02/05/what-homeowners-need-to-know...
Its also only meaningful when measured over a long period which takes good years and bad years into account.
Either that or a barrage of government policies which will make things worse for everyone and continue the US economy's descent into the death spiral.
They profit off the fortunate customers, those who have no need to claim from insurance.
We get what we allow or deserve here in the US. Citizens United led to our current awful outcome.
https://en.wikipedia.org/wiki/National_Flood_Insurance_Progr...
It's a free as anything gets (in that it's kinda hard to distinguish from a tax), and universal (or was when I moved out of the UK): https://en.wikipedia.org/wiki/National_Insurance
California already a dumb communal insurance thing, the "California FAIR Plan" for people who can't get insurance due to high risk. They force insurance companies who operate in the state to fund it. So basically everyone has to subsidize the high-risk people... but then the insurance companies leave.
https://www.cbsnews.com/sanfrancisco/news/california-fair-pl...
I mostly agree with the article that insurance is grounded in statistical measures of risk and there's no point railing against it. Norms are going to have to adapt to increased risk and how we build homes and infrastructure needs to shift away from short-term, low-cost thinking to longer-term solutions with a higher-upfront cost and lower TCO given the new constraints. Things like burying power lines, aggressively managing fire danger, and homes that are built to be more sound to natural disasters have to become the status quo.
Most of these things are already possible today. In my neighborhood, PG&E did an assessment and it would cost every homeowner on the street ~$25,000 to have the power lines buried. I would have opened my wallet immediately to reduce the fire risk, but it got caught up in politics and policy. When we had some renovation on our house, my wife and I insisted on some of the work being done in ways that would make the house safer and easier to maintain over the long work. The contractor balked at first saying it would cost us an extra couple of thousand dollars. I had to point out that an extra $3000 to make sure things lasted an extra 5 - 10 years and was easier to maintain and upgrade meant nothing. But people have to insist on doing better because right now the norm is to cut corners on everything to save in many cases a negligible amount of money over the life of the work or against the cost if there is a disaster.
They're simple (not a lot of corners for burning things to wedge in), they tend very well sealed with smaller windows (so less chance of a window breaking and allowing embers in), and the amount of thermal energy it takes to light a full log on fire is quite high. Radiant heat from a forest fire isn't going to bother a log cabin. It might darken the wood somewhat, but it won't light smooth logs on fire. Even random firebrands and such lack the energy to bother wood.
The only concern would be a shake roof - that would catch fire easily and burn the place down. But a well built and "tight" roof (no massive eaves with vents into an attic, just minimal overhangs) of Class A fire resistance would work just fine.
Metal roofing is not inherently fire resistant, either - it depends on the materials, and what's below it. Some metal roofing can transfer enough heat to the wood below to light that on fire, even without direct flame spread. And, non-intuitively, a lot of asphalt shingles are Class A fire resistant when properly installed.
What doesn't work well, obviously, are the sort of expensive homes with "all the architectural features," lots of inside corners that trap debris, and an incredibly complex roofline.
"Earthships" or other hobbit-hole like houses are almost completely fireproof as long as the entries are handled correctly - anything that can start a fire through three feet of earth is probably a volcano anyway.
It’s a matter of cost (it’s almost never worth it) and tradeoffs.
But if fire survivability is paramount, it is an option.
The only thing that public insurance would do is to provide a way for the state to incur another massive unfunded liability. Except, unlike healthcare or pensions which have the somewhat laudable goal of taking care of poor people and old people, this would go to bailing out rich homeowners who made a bad investment of a house in a flammable area and then refused to spend money on fire safety measures, either in their home or their municipality.
Of course these fire zone bag holders are now clamoring for the state to take on their bad investments by pushing conspiracy theories about the evil insurance companies.
Everyone's talking about fire insurance, but the earthquake insurance question is even bigger and basically untenable in a worst-case scenario. So in that case, CA wised up and the state is much more earthquake resilient than it was 30 years ago.
That only guarantees you have insurance. It does not guarantee that you will be covered or made whole in an incident or emergency.
See FL Citizen's insurance and other insurances of last resort as examples.
What really needs to happen is premiums go up with the cost of risk. But this also means pricing people out of homes, vehicles, businesses, etc. And no politician will allow this.
This is California’s FAIR plan [1]. It’s a wealth transfer from non-homeowners to homeowners, homeowners in low-risk areas to high-risk homeowners, and from low-value homeowners to rich ones.
This almost seems designed to maximise fury. You're still taxing low-risk homeowners to pay for high-risk damages. And when a catastrophe hits, you aren't paying enough to rebuild (or avoid bankruptcy, in which case you're just routing taxpayer funds to creditors). Add to that you've branded it a tax increase it's almost something the GOP would run as a false flag against a Democrat.
We had a way more intense drought than they in my city last year (theirs are not that intense). We also had 50 km/h winds. We also had higher temperatures... And all of those to levels that we never saw before. Also, we have more trees in our cities. We had new "fire hurricane" videos every week (normally, every other year somebody films one).
And we had to evacuate dozens of homes, luckily no one was destroyed and people could return 2 months later.
Specifically, I'm now questioning if your drought was actually more intense. Not exactly sure how you measure that one.
A Santa Ana wind is extremely dry and this one hit 100kmh (not 50). And it hasn’t really rained for 8 months (since May 2024). And we had a very wet winter last year, so there’s extra growth to fuel any fire. And finally, there’s 10 million people live in LA County, it’s a target rich space.
Please let me know where else is having the same sort of fire without destroying homes.
We have 7 million people living around, and yeah, only 6 months without a single drop of rain (19X days, where I don't remember what X was). Fire often destroys some homes, we got luck last year.
If people just point out it's not normal, people complain that nowhere else has fire so nobody else understands the problem. If people point out similar places, looks like it's "Four Yorkshiremen-ing" (whatever that is). So, yeah, let it keep burning, whatever.
Taleb would have a field day with this one. Broadly, I think a big part of the argument is driven by the assumption that the area will be rebuilt, despite being a known fire risk.
I live in an area that had a special warning last summer, we had a very very dry summer and there was a period with low humidity and high winds for a few days, it was considered an unusual scenario with extreme fire risk - but nothing happened this time. Now that I'm writing this I'm wondering what I'll do if it feels like an annual occurrence. Another parallel, the power company warned us they might shut off the power to reduce risk but I guess it didn't get that bad.
Are you suggesting we build houses inside concrete cubes with walls 10 m thick?
I don’t think that’s a very hard thing to do. I’d send you the blog post I read on the topic, but I can’t find it again :(
I live along the Mediterranean sea in France, many wood fires every summer, with wind above 100km/h; never seen so many houses burn like in California even when most of our houses are concrete but with wooden framework.
I'm pretty sure that if houses were built like here (concrete / concrete blocks with terracota tiles on wooden framwork) at lot less would have burnt. Maybe those near the wooded slopes but not in the middle of a neighborhood block.
What does this mean, "popular theme in Russia"
It killed more than 70 people.
I think some of that can be attributed to the fact that buildings are stationary structures that have ample square-footage for embers to land and cause fires, where as trees have less stationary surface area for embers to land, remain and build into fires.
And what's the humidity?
The Santa Ana winds that affect LA are extremely dry and gusty with < 10% relative humidity. It is hard to compare them to anything else.
Apparently it's more than 60% year long: https://weather-and-climate.com/average-monthly-Humidity-per...
I agree climate is a bit special in south California, but what is usually done here when a fire is near a house is for the owner to sprinkle it before the fire is coming; if you take time to sprinkle the roof (which is the only part containing wood here) there is less chance for an ignition.
I suspect the rules for making a defensible house were wrong. For example, I read an article recently that posited that most of the fire was spread by burning embers on the wind, and not by intense heat from nearby flames.
The idea is to look at where embers accumulate and eliminate or fireproof those areas. For example, a low masonry wall a few feet from the house can stop a lot of heavier burning embers from piling up against the house. If you've got a swimming pool, add a pump to it that feeds sprinklers in the yard and on the rooftop.
There are a lot of homes that did not burn - look at them and figure out why they didn't burn.
For a related example, every airplane crash is looked at, and we always discover overlooked vulnerabilities. The tsunami that devastated Japan a few years ago also provided a lot of information about what worked and didn't work.
We're a long way from needing to give up. There's a lot of low hanging fruit.
From what I've read, the houses in LA that did survive were modern or heavily remodeled houses incorporating recent code changes to prevent embers from entering the eaves and suchlike.
It really doesn't help that most of LA was built up in the early to mid 20th century; requiring code updates during remodels can only help so much, because if the cost/change is too much/invasive the homeowners either don't remodel at all or do it without permits, bypassing the more costly safety improvements.
This solves the fire problem AND the limited access to a public resource that is common in Malibu.
Ideally a permeable surface without any growth, cleared at least 2x a year.
https://youtu.be/5h1H36rdprs?t=1m51s
That would easily jump a 10' fire break.
https://m.youtube.com/watch?v=yZe-TlYxm9g&pp=ygUkaG91c2VzIHR...
especially for this fire, jumping doesnt mean that everything 2 miles down wind also burned down. buildings that far had the opportunity to burn, and if they dud, had the opportunity to burn their neighbors, and another 2 miles down.
i imagine ember density is more interesting than distance?
Ooh, and make a bailout conditional on homeowners (or counties) agreeing to eminent domain.
If insurance wants firebreaks for insurance, that is their choice.
If the city wants buy RE for access, that is between tax payers and the land owners. Cash talks
In reality, it is Japanese condos that get gutted periodically or when sold, and it's driven by their real estate tax code.
Japan takes enormous effort to prevent and mitigate natural disasters.
There may have been some truth to it 200 years ago, with the idea that wood was the only economical way to build a house that could last.
PS Also, there are many opportunists, that were burning their houses to receive insurance or compensations, so not all of those houses were burned by wildfires. It all looks ugly, regadless from what angle you look, because if there is no responsibility - even from the ones that have taken upon resposibility, then catastrophe is expected - sooner than later.
https://www.newsweek.com/controlled-burns-california-forest-...
That article focuses on the federal side, but this article by Ars Technica appears to include the state side:
https://arstechnica.com/science/2020/01/why-isnt-california-...
This is false. Fire was unambiguously part of the practice of native Californians.
> opportunists
What is this slander.
The years with lots of rain caused MUCH extra plant growth, and anyone who's been here a while expected several bad fires during our fire season in 2024 as the first "dry" year after a "wet" year. The fact that it's only been 1 major one and a few minor ones has actually been a bit of a surprise.
https://www.nps.gov/subjects/fire/indigenous-fire-practices-...
2. La City defunded fire department removing 100 fire trucks from service due to maintenance. (City Incompetence)
3 Severe fire warnings reported days in advance of the fire. Rather than take precautions and position fire trucks and equipment etc as was done in the past, the Mayor flew off to Ghana. (City Incompetence, Fire Department incompetence (but partly because of cut budget)
4. Forest maintenance has been stopped. (State incompetence)
Competent management is needed or even worse can be expected in future.
I don't know about the other three offhand, but it's absurd to claim that state and local governments in California are somehow not taking fire risk seriously. Do you seriously think that the state that has annual wildfire season just happens to be "incompetent" when it comes to preparing for wildfires?
Because Santa Ynez was empty (for the past year), water was supplied from downhill water sources and the pressure needed dropped off to the point there was no longer any water out of the hydrants.
[1] https://www.google.com/maps/place/Pacific+Palisades,+Los+Ang...
[1] https://clkrep.lacity.org/onlinedocs/2024/24-1600_rpt_bfc_12...
Look, it's known that reservoir was empty, but it's a covered reservoir. You're looking at the the _cover_. That image tells you nothing about the state of the reservoir at the time.
> primary uphill source of water for those fire hydrants
was 3x 1M gallon water tanks. Hydrants were gravity fed until the tanks ran out (8-15 hours into the firefight), at which point water tankers supplied responding companies.
The wild areas near Malibu and Pacific Palisades are more a mixture of chaparral and hilly grassland. There may be some oak trees scattered about, but it feels like more trees exist in the private home landscaping than in the actual wild areas.
2. 'defunded' -> about a 2% reduction. Also it's not 100 fire engines, 100 appartus, which covers ambulance, command cars, etc, and it's not clear what exactly is waiting for maintainence.
3. The Mayor doesn't drive fire engines. LAFD and LACoFD prepositioned according to their models, per the chief.
4. most of the LA fire wasn't forest, but chaparral, which is lower, scruby-er, brushy-er terrain. It tends to burn on a 30-50 year cycle, but burning too much more often destroys the ecoology entirely. Indeninous practice and some research[1] suggest small patch-burning; others (NPS) avoid prescribed burns in chaparral in favor of natural fire and structure defense. So it's not clear that there's an unambiguously better management practice than "its gonna burn sometime" combined with aggressive brush clearance and defense around structures.
re: 2/3 Los Angeles (City mostly, but also County) clearly need a bigger fire department, with more people, stations, and equipment. But the specific complaints are ticky-tacky at best, and (AFAIK) no one asserts that a differnt pre-deployment, or a few more engines in service would have changed anything but the margins. I will say LAFD letting their first shift go off-duty as scheduled while LACoFD kept their shift on is an unfortunate unforced error.
re: 4 USFS (and maybe Cal Fire too? not sure). did halt prescribed burns in October 24 in the face of opposition on liability and air quality grounds. Hopefully the LA fires drive people to reconsider their resistance to prescribed burns, and creates the necessary risk-bearing structures for Cal Fire and USFS to actually perform them.
[1] https://www.fs.usda.gov/psw/publications/documents/psw_gtr05...
Do you agree that if Santa Ynez reservoir had been full as it should have been, that there would have been no issues with fire hydrant water flowing for the Palisades?
Also, do you agree that in the case of private providing of water during the fire, that an entire mall was saved because of that? [1]
Do you agree that a mayor who promised during the election that she would not travel out of country, that then does travel out of country after extreme fire warnings, is not ideal?
[1] https://www.dailymail.co.uk/news/article-14280517/Palisades-...
Water is quite important for fire fighting. Why spin this, the facts are just too clear this time.
Even if you support the entire governmental structure involved ideologically, do you really want to trust them with your life at this point?
I don't care about Bass. She has no role to play in an emergency besides telling the LAFD chief 'go fight the fire with all available resources' LAFD wasn't even the largest fire department responding, and we haven't heard a peep about LACoFD or the county supervisors.
> If the reservoir had been full
>> you're still limited by the flow rate of the main to withdraw from the reservoir
>> the situation was already well out of hand before any hyrdants ran dry.
To expand for your benefit, they were 6-8 hours into the firefight before the hydrants became an issue and ~15-17 hours in before the tanks were fully exhausted.
>> Eaton had so such issues with hydrants, but a substantially similar outcome.
So no, I don't think water supplies supply made a difference at all. If you have the people, and the apparatus to dedicate to wholly one structure, you probably can save it. The actual firefighters were simultaneously fighting hundreds of house fires while a linear hurricane blew it all further and and further down the hill. They had to make the deploy the (region's worth of) resources had they could in the face of an awful situation that would have overwhelmed a state's worth of firefighters.
> Water is quite important ... Why spin this
Please engage with the reality of the situation instead of the simplified fantasy you've imagined in its place.
> why you would
Because I started seeing these talking points on night of the 7th. Certain factions were and are absolutely thrashing to attach blame anyone and anything they previously disliked. There are policy lessons to take from this disaster. LACoFD and LAFD need to be bigger, we need much more brush clearance, we need fewer NIMBYs to complain about the smoke from prescribed burns, ... the list goes on. But these real, essential changes are not shaped like 'one simple trick to stop the LA fires' or a getting gotchas all the woke dem pols.
Don't you find it curious that the mall to fully survive the fire without damage had private fire fighters with water? [1] Doesn't this imply that had the FD had water they could have prevented damage?
[1] https://www.dailymail.co.uk/news/article-14280517/Palisades-...
>> If you have the people, and the apparatus to dedicate to wholly one structure, you probably can save it. The actual firefighters were simultaneously fighting hundreds of house fires
> had the FD had water
>> they were 6-8 hours into the firefight before the hydrants became an issue and ~15-17 hours in before the tanks were fully exhausted.
To elaborate further for you, that means a huge portion of the damage took place before hydrants were an issue. Furthermore once there was an issue, the professional firefighters had the same exact same sort of mobile water tankers supplying them as the private company you mentioned. No professional firefighter has indicated that more water availability would have materially changed the situation.
> defunded
>> about a 2% reduction [YoY].
>> Los Angeles (City mostly, but also County) clearly need a bigger fire department, with more people, stations, and equipment.
Elaborating, in general I think Crowley and Park are completely correct, that LAFD staffing should have kept better pace with population growth. That's a much broader and more diffuse problem though - that of the FD being able to keep up with their day-to-day mission.
However, even if LAFD had kept pace, and therefore was 50% bigger than it is currently, that doesn't substantially increase the response. LAFD is already not the largest FD in the area, and the mutual aid system pulled in LACoFD and many surrounding FDs. A 50% larger LAFD increases the size of the response by <<50%. In the morning after the Eaton fire, one of the commanders outlined the problem thus: a typical structure fire needs multiple engines for multiple hours. Fighting every concurrently structure fire would have demanded thousands of engines - in his estimation more engines than exist in the state, nevermind in Los Angeles and neighboring counties.
So on the specific point: of course -2%YoY funding shifts the margin slightly, and Crowley is right to complain that every dollar will shift the margins of the department's capability, and of the day-to-day mission will feel the shift in margins. But no counterfactual policy choice short of "we spend the next 3 years' revenue on fire engines, and put them outside every home in the city" shifts the margin enough to make a difference to disaster of the scale experienced. So no, one responding FD cutting its budget by 2% played ~no role in the outcome.
--
If you're not just trolling, or here to push whatever view you currently hold, please take a few minutes to understand what actually happened in these fires, and the realities of the situation on the ground. Stop looking for gotchas and start looking for solutions.
[1]: https://www.amazon.com/Before-Wilderness-Environmental-Calif...
And, like all things, of course there are many interdependent pieces in play, like those hurricane force winds, but oak trees don't burn the same as a palm [2]. I just keep seeing that viral video of a firefighter trying to put out a palm while a guy escaped his house on a bike -- it was shedding embers like crazy. [3]
[1] pdf warning: https://www.fs.usda.gov/psw/publications/documents/psw_gtr21...
[2] https://abcnews.go.com/US/elderly-couple-battles-flames-la-f...
[3] https://www.nbclosangeles.com/news/california-wildfires/pali...
Fireproof concrete bunkers would be worse for insurance because when the firestorm blows through and shatters the 7-centimeter windows slits your fireproof design calls for and ignites the interior you have to demolish steel reinforced concrete with machinery instead of knocking down wood with a sledgehammer and muscles.
A Caterpillar D9 is more expensive per day than a migrant laborer.
There are so many images of concrete buildings being burned out that if I search "california fires" the 9th image is of a steel-reinforced concrete building has ~10 meter fire jets blowing out one of its windows.
https://www.civilbeat.org/2024/03/how-floridas-home-insuranc...
Re: California, I don't understand the context for your question, or why you would think the California government is more strange than any other US state government. There's no universally-accepted "ideology of California." It's a big state with a huge, diverse population.
tl;dr, though: California does allow insurers to do that, but is using currently an antiquated set of rules that don't allow for modern risk management approaches. It's been rewriting those rules recently to fix this; I think the new rules are supposed to be in effect starting this year.
Population is diverse and large, yes, but the state government (including the insurance commissioner) is radically biased left/progressive and has been for decades.
It creates a condition where the state can prohibit insurers from selling to residents, if it doesn't like their prices, which has recently lead to a lot of insurers no longer selling in the state, as construction prices in the state have risen significantly faster than inflation, leading to insurance premiums that the state doesn't like.
Residents who no longer have any insurers available can buy insurance from the state, but its far more expensive than the plans it rejected from private insurers.
Sounds like a state-run racketeering business
> As of last Friday, the FAIR Plan had just $377 million available to pay claims, according to the office of Senator Alex Padilla, Democrat of California. It’s not yet known how much in claims the plan will face but the total insured losses from the fires so far has been estimated at as much as $30 billion.
> If the FAIR Plan doesn’t have enough money to pay all its claims, it can rely on something called reinsurance — effectively, insurance for insurers in case their losses exceed a certain amount.
> Senator Padilla’s staff said the plan has $5.75 billion in reinsurance available.
Notably, $5.75B is less than $30B.
> If the FAIR Plan can’t make up its losses from reinsurance alone, it can demand money from California’s insurance companies to make up the difference.
https://www.nytimes.com/2025/01/14/climate/californias-insur... / https://archive.is/Xg6s9
California couldn't set up a more broken insurance market if it tried.
Insurance only really works when most people don’t suffer a catastrophic event and can cover the few who do.
For example, there was a red flag warning that ran from Colorado to Texas at the beginning of this month.
Likewise, the level of infrastructure, tornado, and wildfire risk for the vast majority of the country is not sufficient for them to be uninsurable. "Occasionally a tornado comes through and gets 1 out of 10k houses" is not even a huge pressure on insurance prices.
An
The alternative is to build quadruple-the-price houses out of brick in an area prone to earthquakes.
It's much easier to repair/replace the former. And theoretically would be easier to avoid, if the fed would clean up the brush wood in their land (or give it back to the state, so they can manage it).
https://en.wikipedia.org/wiki/2021_European_floods
Coming from the UK, increased flooding has been an issue for 20+ years and still it's a bit taboo to maybe say it's climate change to older generations
To some extent this has helped with health insurance. Each year I get a check back from my insurer saying they didn't spend enough on my care vs my premiums.
[0] https://pnhp.org/news/insurers-avoid-loss-ratio-limits-by-sh...
[0] https://pnhp.org/news/insurers-avoid-loss-ratio-limits-by-sh...
This has baffled me ever since Obamacare was first passed - it seems that each year the insurance companies have an incentive to drive up the cost of healthcare, since that’s how they earn more money in absolute terms. Is it not so?
People on HN always talk about European health insurance seems like an easier route than to murder people lol
To answer the substantive point, it’s extremely difficult to pass substantial laws in the US due to the structure of its political system. The mandatory coalition of the president + 60% of the senate + 50% of the House of Representatives is a much higher bar than any other democracy. So laws aren’t written to be optimal policy, they are written to satisfy this extremely high coalition requirement — Obamacare in particular was very fundamentally weakened from some of the more expansive initial proposals to address the concerns of one or two senators and get them on board.
what makes senators hate something that is pro the people? wouldn't that give them better ratings? I come from a dictatorship so sorry if this is a dumb question
The short of it is that you can get anyone you want in office, to do anything you want even if it directly opposes their constituency, as long as you spend enough money on them to get them in office, buy their vote, and keep their PR afloat.
Gilens and Page (2014) found that "average citizens and mass-based interest groups have little or no independent influence" on American government policy: https://www.scienceopen.com/document?vid=e4797592-9d73-4f2b-...
Worth noting that this paper saw pushback for many years after the fact but measurably, its conclusion has been true since its release.
The answer was already given: it was politically infeasible to pass a single payer variant in the US. And it’s not clear it would have been good even if it had been feasible.
Could you say a bit more about the politics? this is very fascinating idk much about insurance or politics
This may be super simplistic but Europe, if you look at it at a high level, is as diverse as US states if not more because a lot of places have multi party systems instead of a two party system with comparable diverse interest groups and comparable GDP etc
What did they figure out to have insurance that the US can't? Or doesn't want to?
Not sure how I can say it more clearly. Most European countries have a functioning political system where it is easy (or at least possible) to pass necessary laws. The US doesn’t.
What period do you put it over for property insurance? Profit caps work for health insurance because claims are typically not correlated. The percentage of your customers with cancer won’t 5x one year and go back to baseline the next. New drugs or treatments (or a drug going off patent) can cause correlated swings, but generally costs to health insurers don’t change a lot year to year.
For property insurance, you need to bring in profits most years to fund the year when there are multiple category V hurricanes or large fires.
You could make the argument for this for healthcare, since no one can choose which illness he is born with. But choosing your housing location is a "choice". And you can/should move somewhere else where it is less risky.
Because it's the only way to get universal coverage, which if you don't have, means a portion of the population gets really sick, jams the ER, can't afford to pay the resulting bill (maybe declaring bankrupcy), and someone then has to eat/cover the cost. Often by hiking prices for those that do have coverage.
Do a search for "ACA three legged stool":
> It starts by requiring that insurers offer the same plans, at the same prices, to everyone, regardless of medical history. This deals with the problem of pre-existing conditions. On its own, however, this would lead to a “death spiral”: healthy people would wait until they got sick to sign up, so those who did sign up would be relatively unhealthy, driving up premiums, which would in turn drive out more healthy people, and so on.
> So insurance regulation has to be accompanied by the individual mandate, a requirement that people sign up for insurance, even if they’re currently healthy. And the insurance must meet minimum standards: Buying a cheap policy that barely covers anything is functionally the same as not buying insurance at all.
> But what if people can’t afford insurance? The third leg of the stool is subsidies that limit the cost for those with lower incomes. For those with the lowest incomes, the subsidy is 100 percent, and takes the form of an expansion of Medicaid.
* https://archive.is/https://www.nytimes.com/2017/07/10/opinio...
This 'architecture' was developed by Jonathan Gruber:
* https://cdn.americanprogress.org/wp-content/uploads/issues/2...
* https://en.wikipedia.org/wiki/Jonathan_Gruber_(economist)
It is a form of social safety net.
The alternative that is always there is to repeal EMTALA.
> It starts by requiring that insurers offer the same plans, at the same prices, to everyone, regardless of medical history. This deals with the problem of pre-existing conditions. On its own, however, this would lead to a “death spiral”: healthy people would wait until they got sick to sign up, so those who did sign up would be relatively unhealthy, driving up premiums, which would in turn drive out more healthy people, and so on.
This misses the problem: [the ACA causes a moral hazard for lower classes likely to use it.](https://pmc.ncbi.nlm.nih.gov/articles/PMC8567089/)
The issue is a policy designed for a highly uniform, high social class, high status state (Massachusetts) was applied to the USA as a whole.
I suspect you think it's not great having homeless people on the street.
Wait till you see what it looks like when they actually start dying in the street because emergency health care is no longer available to them, nor to many of their housed neighbors, family and friends.
And FWIW, US Medicare spending alone is shaping up to grow to almost as much as some EU nations on a % of GDP basis (https://ec.europa.eu/eurostat/statistics-explained/index.php...).). Medicare isn't the solution. It's the problem.
And FWIW, US Medicare spending alone is shaping up to grow to almost
as much as some EU nations on a % of GDP basis
https://www.bea.gov/news/2023/gross-domestic-product-fourth-...
https://crsreports.congress.gov/product/pdf/IF/IF10830
The U.S. Bureau of Economic Analysis puts the 2022 GDP at $25.46 trillion ($25,460 billion). Congress puts 2022 spending on private health insurance at $1,290 billion (5%) and Medicare at $944 billion (3.7% of GDP).
The fact that one program (Medicare) is growing to be as large as the NHE should be cause for pause.
What we can and cannot afford is a choice, not some immutable fact of nature.
A cynical, if realist, version of this would be: if we choose to not spend any more ...
But that's still better since it acknowledges that we, as a nation, have agency in this.
Cigarettes can be taxed with proceeds going to care with those with lung cancer. Dangerous activities can have a separate insurance. For a popular sport, it means most people are engaging in this activity. Houses on the top of a mountain are for a very tiny minority (and a very rich one too). They should finance their lifestyles themselves.
Injuries also hurt, so it's not like people don't have other disincentives to avoid injury aside from the price. This isn't the case in other areas, where it's purely a monetary penalty and thus removing that penalty results in way more of that thing taking place.
Are you this incredulous when the response to a failure in "the market" is more "market" ? Or when companies fail, and the response is "more companies", do you question that in the same way?
I'm not taking a position on the meat of your point, but this particular angle strikes me as very strange.
It sounds like a lot, but if the risk is actually that high then the prices will be too. Houses aren't cheap. Insurance is a very competitive market, it's easy to comparison shop. The root problem is the high risk, not "unfair" private profit.
(Numbers picked out of thin air to make a point)
Transfers wealth from shareholders, patients and taxpayers to management, bankers and intermediaries.
Broadly speaking, caps are stupid—akin to treating liver enzymes directly when they spike versus seeing them as the sign of deeper problems.
You do the first part so they don't die before the long-term treatment kicks in.
In the long term, they’re putting a patient running a fever on immunosuppressants. The fever will go. But the patient will die.
Youre about 20-30 years late to the game, but arrive in time to see the conclusion does not match your assumption. See california for fire, florida for fstorm damage, and everywhere in the us for federal flood coverage. It doesnt work. CA FAIR has higher rates to account for increasing the coverage pool, but it doesnt look like premiums will cover the current or future loses. Which is the universal story when your policy attracts all the high risk/payout buyers. And FAIR, roughly, is setup to go recoup losses from all the _other_ insurance providers in the state. Even ones not insuring those policy holders _or that type of insurance_. Its just a layer of indirection to subsidize fire risk against all poly holders.
If I live in the middle of a city in an apartment block should I pay the same rates to insure against wildfire as someone in the middle of a dry forest? Probably not, but govenrment-mandated insurance programs force me to.
Public benefit corps fit this model as do regulated utilities.
I dont get it. Your argument is that if everything was priced accurately and aggregated "fairly" insurance would work. Ok, totally true statement. Very much the case that's not what is happening now for any of the example markets or gov programs.
You appear to believe "profit" is the problem, which is true in that negative profit is known as "loss" which is what has and will be occurring even with the public "last resort" rates. The private insurers are not withdrawing because their "fantastic" 6-15% margin on disaster insurance isnt enough. Using CA as an example they withdrew because 1) the state required they dont use risk based modeling for individual rates and 2) they dont include reinsurance costs as a rate signal. Shockingly their CA insurance pool turned upside down on costs/losses in a decade or two and they bailed.
FAIR is exactly the sort of or youre talking about; non profit government mandated insurance pool, open to all residents, with proportional policy/loss assignment, rates set based on regulated-interpretation-of-risk-exposure + costs, regulated by the CA Dept of Insurance. And yes, their policies are risk adjusted, but theyre not _accurate_. And yes, insurance should accurate according to risk and (payout) costs but basically none of the public last resort issuers can!
See again florida, national flood, etc. In every case 1) risk & cost modeling (accurate pricing) is suppressed on behalf of the public 2) risk prices/costs soon exceed private risk markets 3) private insurers withdraw 4) public "last resort" insurers emerge 5) risks/costs continue to grow, private insurers withdraw, the "last resort" insurer becomes the risk aggregating insurer 6) last resort insurer shockingly cant meet its commitments 7) public funds and/or backdoor insurance taxes socialize losses due to unprices disk.
You can build out of concrete and use fire resistant materials like metal or tile for the roof and your house is nearly fireproof. These buildings would be realistically insurable in both California or Florida. They would cost more to build, not THAT much more though especially if land costs many millions, an extra 50k - 100k to build out of concrete is a very reasonable expense.
Flammable trees well away from a leaf free clean guttered (or no gutter) house are also no compromise requirements.
See: https://research.csiro.au/bushfire/ and https://www.csiro.au/en/work-with-us/services/testing-and-ce...
for the rabbit hole of Australian Bushfire housing certification and testing.
Burning Down the House: Trial by Fire CSIRO- https://www.youtube.com/watch?v=KBtawn7IAnI
Which are almost definitely known to the state of California to cause cancer.
https://pubmed.ncbi.nlm.nih.gov/1947241/
https://mesothelioma.net/fiberglass-connection-to-mesothelio...
mineral wool insulation aren't regarded as carcinogens
https://www.jm.com/content/dam/jm/global/en/MSDS/20000000205...
SECTION 11. TOXICOLOGICAL INFORMATION
IARC No component of this product present at levels greater than or equal to 0.1% is identified as probable, possible or confirmed human carcinogen by IARC.
ACGIH No component of this product present at levels greater than or equal to 0.1% is identified as a carcinogen or potential carcinogen by ACGIH.
OSHA No component of this product present at levels greater than or equal to 0.1% is identified as a carcinogen or potential carcinogen by OSHA
Trace amounts can possibly sweat out in specific conditions .. which is why you might choose to install with a vapor barrier.
Trace amounts can possibly sweat out in specific conditions
Those limits are:
recently manufactured products contribute no more than 9 µg/m3 of
formaldehyde into the indoor air
https://downloads.regulations.gov/EPA-HQ-OPPT-2023-0613-0230...
It also has to be the type of wool that has been treated, etc.
Don't even have to go that far.
Wood framing is fine: make your cladding stucco would do a lot (or brick). You can even have siding as cement-base stuff is available:
* https://www.jameshardie.com/blog/siding-types/what-is-fiber-...
You could have metal or clay roofing, but shingles with a Class A rating is available as well:
* https://www.ameriproroofing.com/blog/asphalt-roofing-shingle...
Just like exactly the rest of the world? We, the non-USA folks, are looking yearly at either fires or hurricanes destroying these wooden houses there and people keep rebuilding them. Insanity.
You can build wood framed (2x4, 2x6) buildings that are resistant to fire:
* https://www.youtube.com/watch?v=yZe-TlYxm9g
A stucco, brick, or fibre cement siding, have 2m/6' clear around the base of your house, tempered windows, and either a metal roof or shingles with a Class A fire rating.
You can make wood not burn on the kind of environment where it would be the only or main object releasing heat. That is still a completely different category from non-flammable materials.
> We, the non-USA folks
Isn't that a sad way to look at yourself?
There is:
* https://www.youtube.com/watch?v=yZe-TlYxm9g
But when a lot of your housing stock is multiple decades old that was built before modern building codes, there's a lot of kindling out there.
https://www.insurance.ca.gov/01-consumers/200-wrr/Safer-from...
https://readyforwildfire.org/wp-content/uploads/2024/05/Low-...
https://osfm.fire.ca.gov/what-we-do/fire-engineering-and-inv...
The problem is storms are getting bigger and more frequent from climate change and hitting areas they normally don't.
They aren't getting bigger or more frequent at all.
NOAA has stated this multiple times and you can read an article addressing it here:
https://www.climate.gov/news-features/blogs/beyond-data/can-...
It's well known that hurricanes go through multidecadal swings.
Why this keeps getting repeated when it's obviously false is beyond me.
> No, we cannot confidently detect a trend today in observed Atlantic hurricane activity due to man-made (greenhouse gas-driven) climate change. Some human influence may be present
> The importance of this distinction between potential causes of AMV for future hurricane projections is clear: if strong man-made aerosol forcing and volcanic forcing were responsible for most of the “quiet period” of Atlantic major hurricane activity from the 1970s through the early 1990s, then a return to this more “quiet” regime in the coming decades may not occur. But if the “quiet period” of the 1970s through early 1990s (as well as the earlier quiet period of the early 20th Century) was caused mainly by internal climate variability, one would expect to return to relatively “quiet” conditions in the coming decades as the climate swings back and forth between more active and inactive Atlantic hurricane periods. This is an important research question that does not yet have a clear answer.
Meanwhile we continue to see stronger storms.
> Another hurricane metric, the fraction of rapidly intensifying Atlantic hurricanes, was reported to have increased since around 1980 (Bhatia et al. 2019), and they found that this change was highly unusual compared with simulated natural variability from a climate model, while being consistent in sign with the expected change from human-caused forcing. Even so, however, their confidence was limited by uncertainty in how well the single climate model used was representing real-world natural variability in the Atlantic region.
We do know for a fact that the ocean temperatures are rising. Also from your article,
> Global surface temperatures and tropical Atlantic sea surface temperatures have increased since 1900 (by around +1.3 ˚C [+2.3 ˚F] and +1.0 ˚C [+1.8 ˚F], respectively), unlike the reconstructed hurricane counts or U.S. landfalling hurricanes. Finally, a number of studies have found that several Atlantic hurricane metrics, including hurricane maximum intensities, hurricane numbers, major hurricane numbers, and Accumulated Cyclone Energy have all increased since around 1980.
But climate science is about studying a complex system, and finding direct causations is hard.
> However, in a 2019 tropical cyclone-climate change assessment, the majority of authors concluded that the recent hurricane activity increases mentioned above did not qualify as a detectable man-made influences (meaning clearly distinguishable from natural variability).
Another study linked recently from climate.gov (near the bottom) https://www.climate.gov/news-features/blogs/beyond-data/2024...
>[R]ecent studies in attribution science show that climate change is causing an increase in the frequency and/or severity of tropical storms, heavy rainfall, and extreme temperatures.
So at the end of the day, it's fine to say there is no smoking gun, but it is absolutely not 'obviously false'. I think your biases are showing.
You won't find a "smoking gun" because it's not happening.
Your biases are in-fact showing that you don't realize you went from claiming it was true to "well we have no smoking gun".
Of course, explaining anything in detail is likely to make people think you work in the industry (I do not) and get accused of being a shill. All of which proves to me that older generations had a much easier life because nobody so financially ignorant today is in any sort of position to be able to buy a home.
All that said, I don't think it's actually a price ceiling. It's a limitation of what factors can be taken into account to set rates, and constitutional amendment from Prop 108 prevents the legislature from changing it.
I have the exact same experience when discussing anything insurance related: People have wild assumptions about how much profit insurance companies are making.
When I ask people how much cheaper they think their insurance (health, home, etc) would be if we forced insurance company profits to zero they usually have some extreme guess like 50%. When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs they just don’t believe it. The discourse is so cooked that everyone who just assumes insurers are making unbelievable profits without ever checking.
Like you said, when I try to bring numbers into the discussion I get accused of being a shill (or a “bootlicker” if the other person is young).
The environment this creates has opened the door for some really bad politics to intervene in ways that aren’t helpful. I wouldn’t be surprised if the eventual outcome in a lot of these places is that politicians pass legislation putting the local government on the hook for insurance after they squeeze regular insurers so hard they have to back out to avoid losing money in those markets. The consequences won’t manifest for several years, potentially after the politicians have left office, but could be financially burdensome. Similar to how many local governments were very generous with pension plans because politicians knew the consequences would only be felt by their successors.
Meanwhile, the health care providers:
> But if you look at the list of companies with the highest [return on equity], you see health care providers or suppliers like HCA Healthcare (272%), Cencora (234%), Abbvie (84%), Mckesson (84%), Novo Nordisk (72%), Eli Lilly (59%), Amgen (56%), IDEXX Laboratories (53%), Zoetis (46%), Novartis (44%), Edwards Lifesciences (43%), and so on. If you want to know which shareholders are making the real money in the health care industry…well, it’s the shareholders of those providers and suppliers.
* https://www.noahpinion.blog/p/insurance-companies-arent-the-...
Do you have any source for this?
I’m assuming (because HN) that you had the USA in mind, and it doesn’t pass the sniff test for me given that US insurance fees are more than single digit percentages higher than other high quality care countries with privatised healthcare systems
* https://www.statnews.com/2024/11/25/unitedhealth-higher-paym...
Note that the first one, United Health, has slightly higher profit margins than the rest because UNH has an enormous business selling healthcare itself, not just insurance (they own a lot of doctor groups and outpatient clinics and employ a lot of doctors and nurses).
https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g...
https://www.macrotrends.net/stocks/charts/ELV/elevance-healt...
https://www.macrotrends.net/stocks/charts/CI/cigna-group/pro...
https://www.macrotrends.net/stocks/charts/CVS/cvs-health/pro...
https://www.macrotrends.net/stocks/charts/HUM/humana/profit-...
https://www.macrotrends.net/stocks/charts/CNC/centene/profit...
https://www.macrotrends.net/stocks/charts/MOH/molina-healthc...
The other big insurers will be Kaiser Foundation Health Plan and various plans franchised with Blue Cross Blue Shield, but they are all non profit.
https://projects.propublica.org/nonprofits/organizations/941...
As for UnitedHealth Group, much of their profit comes from a large software business which is separate from their insurance, care delivery, and PBM businesses. If that software business was spun out it would be one of the 20 largest US tech companies.
In this list, I couldn’t find a single for profit BCBS licensee other than Elevance. They all seem to be mutuals/member owned/non profit.
https://en.wikipedia.org/wiki/Blue_Cross_Blue_Shield_Associa...
> As for UnitedHealth Group, much of their profit comes from a large software business which is separate from their insurance, care delivery, and PBM businesses. If that software business was spun out it would be one of the 20 largest US tech companies.
Interesting, I didn’t know UNH sold software!
In this list, I couldn’t find a single for profit BCBS licensee
other than Elevance.
At a quick glance Highmark and Wellmark are for-profit. And I believe the South Carolina licensee is as well. Mind you a few of the "non-profit" BCBS licensees have been sued over claims that they ought not be considered not-for-profit.
https://projects.propublica.org/nonprofits/organizations/821...
Wellmark is a mutual insurance company (profits go back to policyholders, seems not comparable to a for profit insurance business, and for this discussion, is not going to have a profit margin that results in higher costs to policyholders):
https://en.wikipedia.org/wiki/Wellmark_Blue_Cross_Blue_Shiel...
https://en.wikipedia.org/wiki/Mutual_insurance
>Mind you a few of the "non-profit" BCBS licensees have been sued over claims that they ought not be considered not-for-profit.
I see no successful lawsuits, though. Still seems like Elevance is the only for profit BCBS licensee.
>In 2014, BC/BS of Illinois (Health Care Service Corporation) was sued over its nonprofit status. The lawsuit was dismissed, with prejudice, and the dismissal ruling was upheld on appeal.[62] Similar suits occurred with similar results in other states such as Oregon.[63]
Highmark got labeled as for-profit on its Wikipedia entry likely because they own a variety of for-profit companies including e.g. Highmark BCBSD Inc. and Celtic Hospice LLC.
https://projects.propublica.org/nonprofits/organizations/453...
Specifics aside, I think it is conclusively shown that no health insurance / managed care organization earns a ton of profit margin. No one is going to become billionaire rich by starting up a managed care organization, because they will spend almost all they earn.
It’s such a low profit margin business, that Buffett, Dimon, and Bezos abandoned it:
https://www.healthcarefinancenews.com/news/haven-disbands-en...
But Highmark, the parent organization, is still a non profit.
To who? Are there shareholders profiting? Employees on the take?
> Unlike the non-profit Mozilla Foundation, and the Mozilla open source project, founded by the now defunct Netscape Communications Corporation, the Mozilla Corporation is a taxable entity. The Mozilla Corporation reinvests all of its profits back into the Mozilla projects.
https://en.wikipedia.org/wiki/Mozilla_Corporation
It’s the same with Highmark, assuming there isn’t massive fraud happening.
The shareholders take home only a fraction. But a lot of money gets spent that simply doesn't need to be. Other countries avoid the deadweight loss of the middle man.
Of course, now that getting murdered is on the table, the US health insurance executives might want to up their compensation.
Yeah, and "politicians have to answer to their constituents" is how we got the failed insurance markets in California and Florida. This thread has now gone full circle.
To buy votes, politicians sell “insurance”, but in reality it is a subsidy to a specific group of taxpayers.
When a government directly pays for healthcare, it can’t be called insurance, and so limits to the subsidy are easily attributed to the government leaders.
Whereas, if a government has the population buy “insurance” from non governmental entities, then it can pretend (for the layperson) that it isn’t a government subsidy and so the laypeople can blame limits of the subsidy on someone else.
Obviously, health insurance in the US is far from health insurance and premiums are closer to taxes being paid rather than premiums for one’s own health risks.
That isn’t so true in property and casualty insurance, at least not until governments like California step in.
People are still building in flood zones, or shorelines which will go under. Governments dont have the ability to tell their citizens the bad news.
Someone has to do that, but politicans arent going to take that role up.
that's not a sophisticated analysis. it would be like saying mcdonalds is unecessarily expensive because executive pay, and cars, and dry cleaning, etc. etc. yet, if you tried to found a competitor, you'd have all those same expenses. even charities have to pay management.
insurance companies make money because their aggregate risk is less than your individual risk, and you really don't want your individual risk so you are willing to pay them extra, a premium, to get them to shore up your downside. After that it's like any other company selling any other thing.
They're high because providers are making huge profits.
Now granted, they may ultimately be the same thing, but that's a different discussion [1]
In the context of housing (fires, hurricanes etc) insurance is expensive because housing is expensive to build.
[1] insurance companies have to invest their income somewhere. It makes sense to choose companies will high returns. Which includes some health care providers. Which can basically change whatever they like because of structural reasons that have been well discussed.
United Healthcare alone made $23,000,000,000 in profit in 2023. Health insurance companies have collectively made $371 billion in profits since the passage of the Affordable Care Act.
Property & Liability insurance (home, car, etc) have relatively modest profit margins, but health insurance companies absolutely are making huge profits.
why is this number considered huge? What measure are you using? These absolute numbers are meaningless, because you have to put it into context. That's why profit margin is what analysts use, not the absolute number.
If i changed those figures to: they made $77 per person, per year in the USA for providing healthcare services, does that still seem as big? Or is it now reasonable?
https://www.unitedhealthgroup.com/investors/financial-report...
The end-to-end cost society spends on paperpushing is easily hundreds of billions of dollars per year. (Including time lost while waiting on hold to call them, the actual literal work of dealing with these fucking printouts at each stakeholder, the extra effort placed on the paper industry, the postal service, and so on.)
Profit margin is all revenue minus all expenses.
>and dividends i assume would be part of that profit margin.
Dividends and share buybacks are not expenses. They are not money spent for the purposes of operating the business, they are awards to the shareholders. As such, they are not an expense. Dividends and share buybacks happen with the profit, so they will never be included in expenses used to calculate profit margin.
There are lots of highly qualified people at the SEC and FASB working to ensure some semblance of accountability. There is a reason why people from all over the world want to invest in a developed countries’ public equity markets, and that is a belief that most of the time, the numbers are very close to the truth.
In practice yes, but technically no. If a "non-profit" brings in 100 million dollars, and pays all 100 employees a million dollar salary, then that "non-profit" has made no profit. But when someone hears that a "non-profit" made "100 million" dollars, they think it is some kind of scam or something.
You have to look at the entire healthcare picture and realize that insurance is the system driving the exorbitant costs. There is no legitimate reason for healthcare prices to be so insane.
these profit margins are why some people claim that the US is actually subsidizing the rest of the world's low cost health outcomes.
These companies make money in the US, at high margins, which enables them to operate at low margins in other more regulated countries.
"Executive compensation" is even a "smaller slice" than profits, orders of magnitude smaller.
There is also a lot of other smells of a lack of a competitive market. Very opaque pricing, limits to how many hospitals can be opened in a region, needing paperwork to push against that limit, limits in residency slots, the entire hazing ritual of residency in the first place, limits in opening medical schools, ever escalating requirements to become a doctor, restrictions against doctor owned hospitals or clinics, the fact something like an epipen is still not out of patent and not having many clones by now, large barriers to make medical devices and medications, while simultaneously having great issues with generic drug quality, a horrible food system compared to Europe, while simultaneously having a much harder regulatory state medically compared to europe, etc.
You can typically endure hunger for 15 minutes for the time it takes to go to another food store.
On the other hand, if you are bleeding out in the ER, no such luxury exists.
Insurance executives have a fiduciary duty to maximize the profit of the company.
If the company makes a profit off of treating patients, then it has a financial incentive to not approve treatments that would make patients better.
If the company loses money treating patients, then it has a financial incentive to deny treatment as much as possible.
Unless a legal structure is found which scales profit with quality of care, ethical choices will be at odds with the fiduciary duty of the company officers. Having an AI say “no” and putting someone on hold is a lot less expensive than paying out for a cure that cost billions to develop.
In the case of government-run healthcare, the government at least sees the consequence of poor health outcomes in decreased productivity, competitiveness, gdp, and/or tax revenue, as well as increased use of social services.
In other words, if the insurance company refuses to treat you, it costs the government money to pay for welfare indefinitely, not the insurance company.
There are lots of perverse incentives at work, and vanishingly few people even try to understand them, I think because most people simply don’t believe it could possibly be as bad as it is. And by the time they learn otherwise, they care more about getting healthy again than overextending themselves trying to solve a massively complex problem.
Probably not. Many insurance companies are not "for profit" companies(not a 501c3, something else). Certainly some are, but most of the giant ones, State Farm, etc are not. Most are Mutual Insurance companies: https://en.wikipedia.org/wiki/Mutual_insurance which handily includes a list of them.
I.e. they are operated more like Vanguard, the investment firm than they are Fidelity(a private for profit company) or Schwab a public for-profit company.
Also, this fiduciary duty thing is not really true, but people think it's true. They do have a duty to work in their shareholders best interests. Lately that's been taken to mean profit above all else, but that's a recent(last few decades) interpretation.
> If the company makes a profit off of treating patients, then it has a financial incentive to not approve treatments that would make patients better.
It depends on if they share the cost(s) of keeping patients healthy or not. Incentives matter. If they are incentivized to keep people healthy, instead of just treating X disease today, it would be a different conversation.
> In other words, if the insurance company refuses to treat you, it costs the government money to pay for welfare indefinitely, not the insurance company.
> There are lots of perverse incentives at work
Agreed. But mostly it's just excess waste as far as I know. I'm not an expert in healthcare, so I'm at best a armchair quarterback here.
Good point (buying food would be a nightmare if it worked like American health care!) but that's a different argument from the one made above in the thread, that a profit motive in a vital good inherently creates perverse effects.
If you're going to tell us that because health care providers and health insurance companies are some kind of magic counterbalance against each other that benefit consumers, uh, nope.
A: All men are tall, therefore Giannis Antetokounmpo is tall.
B: Your proof is wrong: see this man here, he isn’t tall!
A: Clearly he has nothing in common with Giannis. He’s not even in the NBA!
Are you talking about healthcare specifically or businesses in general? AMD wants to make the best CPUs for the most amount of money. Is that "unethical"?
Yes, it is deeply unethical that someone can be bankrupted and become homeless because of a treatable condition because the "market" has decided a price for the service that is astronomical without insurance, while at the same time tying insurance to employment, dividing up insurance markets, and making coverage subject to inscrutable, unappealable decisions made by people sitting behind desks in a completely different part of the country, while the leadership of said organizations and investors make higher profits than ever. It is deeply unethical that a CEO can make tens of millions of dollars--which for most regular people is several lifetimes worth of earnings--in a single year, while dealing in a market that regularly denies coverage to people who then suffer, are financially ruined, and die.
It's not the same as making a better CPU for more money. Not. At. All.
For profit fire, military, or police departments result in some very obvious issues, and they would simply be causing maximum distress.
For profit / Not for profit, are all serving the same goal - human well being. We choose for profit models where they would result in surplus, and non profit where its more applicable.
at least thats the theory. Reality is more messed up.
This is besides all the inefficiencies, and nonsense. For example even if a patent hypothetically knew exactly how long a procedure would go, exactly what personnel would be involed and how, exactly how much anesthesia/sutures/other billable supplies were used, and that there were no complications, and even if they know that no denial of coverage would happen, it is not structurally possible for them to know the out of pocket costs, except for the handful of surgeries that get treated as package deals. It would literally take dozens of hours of phone-calls to the hospital's and each provider's billing department to get the exact codes and amounts they would submit, and then trying to get insurance to price the hypothetical bill, or provide you with sufficient information to price it yourself. And obviously a bunch of the information we are assuming the patient has are unknowable until after the fact.
Part of the problem is insurance has a huge rule engine for deciding which line items are covered by not-allowable (meaning they get written off), plus insurance contract rates are only public for hospitals (so no info for providers that bill separate), and even then the data files don't always contain sufficient data to determine which of the multiple allowable rates for this procedure with this insurance at this facility, with these caveats actually applies).
A few examples: I wanted to get a CAC scan that my insurance wouldn't cover. My insurance website said that a CAC scan would cost this much with my insurance, along with a total price that would be charged, covered or not. It was something like $80 total. I then called the place to get a CAC scan, and they said since the insurance didn't cover it, the price was $300, and there was no cash pay direct price where I could get it at the listed $80 price, even though they could hypothetically bill the insurance, and the insurance could just bill me the full price. The same place does not have a price listing; there is no online ordering I can do for the CAC scan, I needed to go through a permission process by talking to another doctor to even get the CAC scan in the first place. The fact I even needed to call people, and there was all this bullshit, to do direct cash pay for a simple scan is emblematic of a very broken system.
Or I want to get a blood draw for a blood test ordered by a doctor at one medical. They do not list the total price, even though that should be automated and very clear since it isn't a procedure that would have any 'complications'.
Even the simple shit is not clear at all and takes way more work than it needs.
When you point out that, for example, health insurance profits are low
single digit percentage of overall healthcare costs they just don’t
believe it.
You ever think it's curious that for-profit insurance companies pay out 2–3x what Medicare does for the same procedures?
You know what else is "a cute bit of misdirection"? Mentioning that profits are capped without mentioning why it's that way in the first place.
>You ever think it's curious that for-profit insurance companies pay out 2–3x what Medicare does for the same procedures?
...because the government low-balls healthcare providers?
...because the government low-balls healthcare providers?
When you consider that single digit percentages of trillions of dollars is still an obscene amount of money it makes sense. People making tens of billions by applying formulas to spreadsheets and shuffling other people’s money around doesn’t sit right with most people.
An alternative is to split these companies into smaller companies, which will each have much lower profits but also higher costs due to lost efficiencies, but people will not be happy with that either.
The federal government will pay you $4.4 billion a year[1] if you lend them a trillion dollars, no "shuffling money around" required.
[1] current 5-year treasury yields
It's not that I don't believe it, it's that this figure is completely unrelated to the damage and waste caused by the system of healthcare and health insurance we have in the US.
I mean, in a system of chattel slavery, you see above-normal profits competed away, but that in no way means the system isn't exploiting anyone, because that's not how the harm shows up! And yet still we'd see that argument get batted around in comments like yours:
"No, your owner can't possibly be exploiting you because, when you consider your purchase cost, he doesn't actually make much profit!"
Its not just the insurance costs either. My neighbor is an architect who now does planning/consultation with the RFS (rural fire service, australia). Its basically de rigueur for people to try and avoid or evade fire sensitive planning controls. Just the most basic concepts like defensible space, eve guards, or nonflammable finishes, let alone adequate on site water storage or site access. People are intentionally building in bushland because they want to be “in trees”, unless they block the view of course.
Even if they understand the concepts and remember black saturday, or a few years back!, it doesnt apply to them. Theres no concept of personal risk & consequences, and theyre right. They will probably get bailed out by volunteers and socialized losses. Just like new developments along riverine flood ways.
To pick random examples of unrelated companies, McDonalds or SpaceX would also refuse to insure you against fire. Why should people hate State Farm for this reason, but not McDonalds or SpaceX?
If State Farm didn’t exist and the state ran insurance instead, and were willing to insure all comers, they’d be subsidizing people who can’t be insured profitably. That’s not crazy on its face (the state subsidizes lots of different things), but it’s at least worth asking why we should be paying for people to live in high-fire-risk areas rather than any number of other things the state could be spending those resources on.
They don't, but they have the courtesy of giving myself and thousands of others a proper heads up. Perhaps any heads up? They quite literally just dropped me, no email, no letter, no nothing. This type of thing should be given 3 months minimum.
> To pick random examples of unrelated companies, McDonalds or SpaceX would also refuse to insure you against fire. Why should people hate State Farm for this reason, but not McDonalds or SpaceX?
Alright, you just lost me, not even bothering to read the rest of your post. To answer your utterly moronic question: because they aren't in the business of insurance. I award you no points, and may god have mercy on your soul.
No way that happened, the state would not allow it.
https://ktla.com/news/california/state-farm-to-non-renew-720...
>It’s important to note that nonrenewal is not canceling. Customers affected by the decision will retain coverage until their current contract is up. The company said those impacted will be notified between July 3 and Aug. 20.
I don’t think it was moronic at all; the point is to get to the bottom of what assumptions and axioms you’re using. What is the moral framework according to which you claim State Farm has wronged you. Only then can we judge whether your claim is in fact correct.
> because they aren't in the business of insurance
So, if I understand your implicit argument correctly, it seems to be that anyone who sells a product be forced to sell it to anyone, no matter how costly it is to them.
There’s no McDonalds in Barrow, Alaska, presumably because running a McDonalds there would be prohibitively expensive. Is that immoral? Should they have an obligation to open a store there?
That is clearly, clearly not my argument, but I have a feeling that you're one of those bad faith "and yet you participate in society, curious!" guys, so I'm done here.
And what is fire insurance? Is that something unique to CA?
CA regulation basically capped their premium increase and my insurer did calculations that said “this is a net negative business”.
If I had a business making a loss I would get out, so why would I blame my insurer for doing the same?
https://www.insurance.ca.gov/01-consumers/101-help/index.cfm
It's likely that you are not alone, but I've not heard of anybody not getting notification, despite a lot of people not getting renewed.
In the face of climate change, places that have been safe for a very long time are becoming unsafe. But I don't see a reason these shifts won't happen over and over as climate change unfolds. It might be worse than mass migrations... migrations to locations which later become dangerous, turning into recurring mass migrations.
How well can we predict where it will be safe in the coming decades and where it won't. Coastal land at or below current sea level (plus storm surge) is fairly predictable, especially where there isn't the population density (and money) to support building sea walls. But with things like rivers changing course (e.g., https://en.wikipedia.org/wiki/Alsek_River), it might become very difficult to predict what's going to be safe down the road. Today we talk about things like 100-year flood plains, but how will we establish flood probabilities when the river that might flood in 10 or 20 years doesn't even exist today?
Are the people who get unlucky with predictions just screwed because their home equity is gone? Or are we going to decide to shoulder the burden together? We're going to find out a lot about humanity, the role of government, etc. as we go through all of this.
Disagree. "the entire economic system that caused climate change in the first place" is also responsible for the green transition, including cheap electric cars and renewable energy.
>Once we stop sacrificing our lives in the name of Almighty Profit, then maybe we can move forward and come up with solutions that aren't just "lol stop living in LA".
Alright, what's your solution to "the entire economic system that caused climate change in the first place" that aren't just "lol just stop capitalism"?
In the many many complaints I have heard about the insurance industry, nobody has complained about them acting as an oligopoly or about a lack of competition.
Further, pricing is extremely regulated in terms of what can be factored in, so being an oligopoly doesn't have much impact on that.
Does not answer the question. With no price caps, no one will be able to buy insurance even if required by law. So that means if you own a house in a risky area, you will be unable to sell it and your values will fall. The price caps are to prevent that. But to me, there should be big incentives to prevent building and re-building in risky areas.
So yes, the world in some areas are uninsurable. And other areas are becoming uninsurable.
In some cases it makes sense to socialise the losses, but I'm not convinced this is one of them.
So in reality the burden is falling on Insurance Companies. High rates will in a way prevent building in those areas.
good?
I very strongly doubt that say Elon Musk or Jeff Bezos wouldn't be able to afford market-rate insurance costs. They would just choose not to because its too expensive. Which is the point of letting the market set the rate
Burden of proof?
> the insurance rates in Pacific Palisades or on the Florida coast would be so high that no one could afford to live there…
Seems like the result is the same — people will live there but without insurance.
Change the euphemism from government to private insurance to satisfy capitalism gods and keep their giant foot from squishing us… still “on the books” as a co-mingled pool of funds to shift around to solve problems.
Aw …sad… other people exist and need resources too. Not just about your first world skin suit playing temp host to a run of the mill electromagnetic field effect.
But the dikes have been collectively maintained through laws and regulation from a local semi-democratic system for 800 years (separate from government). It was a necessity as 1 delinquent could screw up everything.
The most recent moves seem to be relaxing the pricing rules to allow major disaster pricing and recharging reinsurance rates in exchange for insurers offering more policies in high risk areas.
> The Bulletin was issued pursuant to California Insurance Code section 675.1(b)(1), which states that an insurer “shall not cancel or refuse to renew a policy of residential property insurance for a property located in any zip code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency . . . based solely on the fact that the insured structure is located in an area in which a wildfire has occurred.”
Typical California redistribution...but this is from the bottom to the top.
Do you not understand that this is precisely how insurance works?
Of course insurance is about pooling risk. But subsidizing implies you’re doing it below market rates.
If I pay my market rate but still -EV insurance premium, I’m not subsidizing anyone. I’m just happy to pay for the convexity insurance provided.
If I have to pay 20% more than I otherwise would, because the insurance company can’t charge someone else 20% more, that is actual subsidization.
A subsidy distorts natural market forces. This is what I am talking about.
Don’t be so quick to be a dick.
Call me crazy but if I was the mayor of LA I’d make them invest heavily in PREVENTION. Cameras and drones all over the place in the forests, to nip fires in the bud (and carch arsonists). I would also make sure that the live video footage would be used only for that purpose. It would use AI at the edge to flag every fire immediately and alert nearest authorities, and otherwise delete footage. There may be other AI at the edge uses added later by the regulators but I’d work to put in place heavy bars to overcome (eg 70% in a public referendum) before they are added.
I would also invest heavily in mobile firefighting tools and materials. The firefighters using buckets is pitiful.
But then again, LA hasn’t invested in itself for decades. It’s like the opposite of NYC: rich people don’t want to live in Downtown LA, they live in the equivalent of our Brooklyn, say Manhattan Beach and Sheepshead Bay by the beach.
Because half of downtown looks increasingly more like skid row. Signage and streets are something out of the 70s literally. And there pretty much hasn’t been any new skyscrapers built since the 80s. The skyline is stuck in the Arnold Schwarzenegger movie era.
I stayed in Freehand hostel which is actually pretty nice, even though there’s abandoned buildings and homeless all around. I met a drunk Andy Dick there by the pool one evening LOL.
And you people from San Francisco — it ain’t much better over where you are. I visited Twitter HQ right when Elon took over. And let me tell you — there is a curious juxtaposition of City Hall, City Opera, The SF Philharmonic, and the fourth corner of that illustrious intersection is… a large abandoned alleyway with dumpsters. What? Imagine Lincoln Center in NYC having that.
On my show I did a lot of interviews — with regulators, technologists, sociopolitical commentators like Noam Chomsky. But one of my most down-to earth interviews was in SF of a homeless guy w his dog. See it for yourself what I’m talking about:
https://www.youtube.com/watch?v=rqjFeaDLuYQ
PS: to the silent downvoters… normally I don’t mind but this time you’re just doing it out of spite. Watch the video or say something. I bet you live there and don’t want to have these things pointed out. SF and LA were so great… so many movements started there. Lately people are fleeing and the homelessness is out of control.
NYC doesn’t have them and the city smells terrible from all of the garbage
In fact my video literally shows trash on the street as well in SF, as well as homeless.
Seriously, other cities have city hall. There are no dumpsters around it. We have courthouses and government buildings.
Certainly none around Lincoln Center which has the Metropolitan Opera and NYC Ballet and Philharmonic. It doesn’t smell there. There are beautiful fountains etc.
I took some photos of the homeless in SF juxtaposed in front of the skyline in the background. It is very pervasive there. LA and SF seem to be magnets for homeless.
If I was mayor I’d give them all a $50 phone preloaded with gigs including ones from the city, like sweeping the streets and from businesses such as handing out flyers. Have the app unlock mini storage and showers, and help them have digital ID. This ain’t rocket science. Crowdfund the support for each homeless the way we support kids in Haiti. Give them opportunities. But instead the bureaucracy just kicks them around and denies them opportunities without an address.
Anyway…
Larger buildings like a city hall or Lincoln center will have better waste management than a bodega or small shop. The larger places will have a loading dock and probably a compactor. Source: I worked at a waste tech company
This is a terrible way to deal with fire. The issue isn’t preventing fires from starting at all, because small fires are all over the place. A dropped cigarette can light a city block on fire if the wind is just right. The issue is preventing spread, and taking precautions when conditions (like wind) are conducive to rapid spread.
If anyone ever implements your drone-based surveillance-state wildland fire suppression system, please let me know so I can avoid hiking in the area.
If you want to do controlled fires IN ADDITION to the fire suppression system, you can. If fires are the only way to neutralize the fuel, at least control them, and don’t allow any uncontrolled fire to spread and get out of hand. The controlled burns would be planned in advance, done on good days and isolated from spreading too far. Of course those burns would be excluded from the fire suppression system.
But it seems reckless to just “let the fires spread”. You need actual control over fires if you want to have any chance of avoiding disasters.
Imagine you did this in any other area where you're in charge of a system. For example you run a forum and refuse to implement any sort of moderation or spam control. You claim we shouldn't put anything in place to clamp down on it and need to let things run their course naturally, because sometimes risking spam is necessary to get really good updates about stuff by experts. The proper thing to do, then, is to intercept spam from spreading as much as possible but then carve out a whitelist of exceptions. Not to simply not have an anti-spam system at all.
Prescribed burns make sense in certain high-risk areas, but there's no substitute for actual, natural forest fires. We can never artificially cover the same kind of area that a natural fire can cover.
> For example you run a forum and refuse to implement any sort of moderation or spam control. You claim we shouldn't put anything in place to clamp down on it and need to let things run their course naturally, because sometimes risking spam is necessary to get really good updates about stuff by experts.
That analogy has absolutely no bearing on anything we're discussing. Online forums and human behavior aren't a good analogue for forests and forces of nature.
I'm not so sure. The Pacific Palisades have astronomical real estate prices. (actually costly property in Florida isn't cheap either). I think the insurance costs would come out of the property prices.
I say this on the basis that the prices the real estate sells for is already what the market will tolerate, if there are other costs to owning it-- then the remaining part the market will tolerate will be less.
Perhaps a result of this is that it may only be realistic to construct lower costs 'disposable' cabins in areas with higher disaster risk... if so, that wouldn't sound like an unreasonable way to allocate resources.
Is it a bad thing that we should consider most of the planet unlivable because disasters happen that aren't eternally and increasingly profitable to insure?
Is it a bad thing that literally tens of millions of Americans would no longer have insurance? That you're asking double digit percents of the entire population to leave cities and just... what? Suddenly have new homes in a region with plentiful resources and access to water and food and an economy and no disaster potential?
Is it a bad thing to compare entire states to missile testing grounds?
Is this satire?
https://wildfiretaskforce.org/updated-fire-hazard-severity-z...
The Florida situation is actually markedly different. The main problem was extreme litigation-friendliness. Florida saw 80% of the nation's insurance lawsuits but only ~8% of the insurance business. They've also since passed some reforms (HB 837, 2023; SB 2-A, 2022).
But I do agree they should be able to set the premiums, otherwise they just go bankrupt. People should not live in idiotically constructed neighborhoods in danger zones if they can't afford it. But they shouldn't be gouged.
You can replace "insurance" with any other business, the whole of capitalism is built upon this. Every stock on the stock market is trying to "provide returns to their investors" - each one is as guilty as the next - theres nothing special about insurance companies.
If the argument is that insurance should be a federally provided service, then we must have a different conversation. Look at the FAIR plan. They are government created, and will get wiped out because of these fires, possibly because they weren't charging enough to begin with (and taxpayers will now need to bail them out). The math doesn't change whether its state backed or privately backed. If a home, on average, gets burned down every X years, then the insurance premium needs to be adjusted to be able to cover that.
And here is the crux of the problem - if you take away the free market aspect of being able to adjust prices, and get forced to sell a product/service for less than what you need to, there will be a loss somewhere, in this order of operations:
1. loss at the insurance company --> insurance company goes broke or leaves the state
2. loss at the FAIR plan --> FAIR plan reserves get wiped out
3. loss at the state level --> taxpayers need to bail the situation out.
Id argue that letting the free market work (at layer 1 above) is the proper way about it. If a house burns down every 10 years, let insurance charge 10% of that cost, because that is the actual risk involved in the system. House prices will naturally come down to reflect that reality of risk.
At some point you have to consider that as indistinguishable from having a policy to drive people out: deny them insurance, wait for natural disaster, redevelop the now-very-cheap land however the government and its developer friends wants. Whether such a policy is adopted on purpose may not be possible to tell. You'll get called a conspiracist if you even hint that you wonder about it. But you know these people know -it's hard to believe that they don't- what happens when you set price ceilings.
You can't get a mortgage without insurance, so if insurers were allowed to freely control the price, they'd charge an arm and a leg since buyers are forced to buy. If insurance companies are allowed to freely raise their prices, then they would certainly love to do so because any homeowner with a mortgage would be absolutely stuck and have to pay whatever they demand or risk the bank taking their home back.
I think you have an idea that the free market would naturally lead to an efficient insurance price that let's them cover disasters. But markets aren't magic, and insurance markets are anything but efficient. I don't think anyone really knows what the "right" price for homeowner's insurance is in places like Florida and California.
It's happened before. Chicago's reaction to the Great Fire was simple - no more building wooden houses. Chicago went all brick. Still is, mostly.
The trouble is, brick isn't earthquake resistant. Not without steel reinforcement.
I live in a house built of cinder block filled with concrete reinforced with steel. A commercial builder built this as his personal residence in 1950. The walls look like a commercial building. The outside is just painted cinder block. Works fine, survived the 1989 earthquake without damage, low maintenance. It's not what most people want today in the US.
with sufficient competition, it is impossible to price gouge.
So if there is supposed price gouging, then there must be insufficient competition. Therefore, the source of the lack of competition would need to be removed (ostensibly, by gov't - such as increasing business loans so that new insurance companies can be started).
Don't let the perfect be the enemy of good enough.
You either fight the good fight, or roll over and die. Your choice.
—esoteric capitalism
You can't just let the currents and tidal forces ("the invisible hand") run the show unconditionally because even though they can propel you great distances at very low cost, they'll eventually throw you upon the reefs.
And you can't just let the rowers and tillers (legislators & executive) run the show unconditionally because they'll end up exhausting themselves with little to show for it as they fight against the winds and currents when they should cooperate.
It's a balancing act that requires some science, some experience, some luck, and a steady hand - and a capable and honorable captain and crew who believe in the mission.
If I'm reading it right, and the prior context, we shouldn't allow private insurers to charge the prices they want for insurance?
What do you want us to do? Ultimately someone has to pay for the bad outcomes happening here - either that's homeowners in risky areas, insurance shareholders or the general taxpayer, depending on where you fall.
If you don't make the ultimate originators of the risk pay for it (people in risky areas) they won't stop doing the stupid thing and others will bear the cost. Arguably that is the greatest strength of the "free market" - directing the efforts of everyone in the same, positive, direction.
There's no universal solution. A "free market" approach will work in some areas, and fail spectacularly in others. Same goes for a full-on centralized control approach.
And in all cases, you also have the confounding factor of bad actors gaming the system - and your current tools may be insufficient to meet the challenge.
So you need a human guiding hand to make sure things don't go too far out of whack.
This isn't an either-or decision. Stability doesn't care about whose motives or approaches are more "pure".
The "human hand" guiding outcomes still needs to get it's resources from somewhere, presumably from government tax income. I disagree this will necessarily result in better global outcomes than the free market.
In cases where almost everyone agrees people should always have access to a service (healthcare) I think it does make sense to obligate everyone to pay. I don't think it makes sense in this specific case of wildfire insurance.
The free market here seems to be failing by your definition because it can't make money. To me that's it succeeding. It's demonstrating that it's underpriced, and people being unwilling to pay the necessary prices shows that they need to find somewhere else to live.
Amusingly enough, the lack of housing itself is another problem caused mostly by human-guided hands in government, not the free market. Enlightened despotism always sounds great when they agree with your perspectives, the reality is rarely so smooth.
Allowing insurers to make a profit and run a business without interference is going to be cheaper - and in most instances better - than whatever the politicians are trying to build here. If you get rid of all the mandatory-this and price-gouging-thats then to stay in business insurers have sell products that people want to buy at a competitive yet sustainable price. It works for food, it'd work here too.
I always found it funny when insurance marketing talks about "personalized rates", when the goal is to DE-PERSONALIZE the risk. If you have 10,000 customers in Los Angeles, and 5 million elsewhere, you can either isolate the LA customers and charge them the "real" price of the risk, which will be unviable as a business and probably politically touchy too, or you can include them in the broad pool, and the people with a full-cinderblock home in a non-flammable state pay $20 more a year so the entire endeavour can work.
The concept probably works better if you have some concept of social cohesion to lean on-- you might not get the best possible outcome personally, but the system itself is more robust for everyone.
If one pool of people are taking a bad deal vs the market rate when buying insurance then it isn't really insurance any more. It is a transfer payment a.k.a. welfare. Which is cool and all in the sense that welfare is a social tool that exists. But calling it 'insurance' is needlessly polluting the language. If people expect to hoover money off others then they should be charged more until the expected return of everyone in the insured pool is equal. If the payouts are going to be held equal in the event of a disaster then that means the price of insurance has to vary depending on the risk profile of the customers.
Its called solidarity and yes, it means some people NOT have to pay more but others recieve more. Paul AND Peter get the security of disaster coverage in exchange. This is what you pay for. A big risk pool and not your individual disaster recovery.
It is insurance. You pay money, the company takes away the risk. That doesn't make it a bad deal, that makes it a service. That is like complaining about a hypothetical garbage company that charges for taking away trash even though the trash might have some notional value.
Insurance isn't an investment scheme. If you want to pay money for a positive-expected-value deal, go buy stocks and bonds.
in other words, you pay more than you would on average loss from bad events - but you avoid catastrophic losses that would break your life
that is why insuring your phone is likely a bad idea (as you can pay for a new one) but liability insurance or insuring your home/flat may make sense
> If it has to make any profits - or at least pay salaries - it's guaranteed to be a bad deal for everyone.
paying 3k per year, to avoid 1% risk of 250k losses may be a good idea, especially if 3k loss is survivable without trouble and 250k loss would be more than 90 times worse.
You are basically guaranteed to pay 3k to avoid financial risk with a mean value of 2,5k. That sounds like a fallacy to me (isn't it the same as saying that paying 3k for 1% chance of winning 250k is a good idea?), may make sense psychologically though.
Every dollar does not have the same incremental value. Going from $1B to $1B-$250k is not the same as going from $300k to $50k, and definitely not the same as going from $50k to -$200k.
If loss of 250k would ruin my life and loss of 3k would be annoying, then paying makes sense.
Similarly, taking bet "double your wealth at 51% chance, lose every single thing you own at 49% chance" likely makes no sense, despite mean value being above zero.
> isn't it the same as saying that paying 3k for 1% chance of winning 250k is a good idea?
not in cases where loss of 250k would be more problematic than benefit of gaining 250k
for example loss of 250k may make someone homeless while gaining 250k would allow them to live a bit more comfortable - in such case bad effects of loss are much greater than gaining 250k
in other words, utility of money is not on a linear scale
This is simply untrue.
This may be true for health insurance, because there is a strong moral case to be made that is unfair and illiberal to make people pay more for genetics or simple bad luck that result in them being likely to need more health care.
It is not true for home insurance, where people can choose where to live and choose what kind of housing to live in.
The purpose of home insurance is to reduce time-based variance for disaster, not for people in low-risk properties to subsidize people in high-risk properties.
It is not "solidarity" for someone in a steel-and-concrete house with a metal roof who clears brush and trees from around their house to subsidize someone who lives in wooden mansion who doesn't take any fire precautions. It is a perverse incentive.
> If it has to make any profits - or at least pay salaries - it's guaranteed to be a bad deal for everyone.
Again, it is not the purpose of insurance for it to be positive expected value for people in high risk homes! It is expected for insurance to be negative expected value. The point is to reduce variance.
https://reason.com/2024/01/10/the-feds-shouldnt-subsidize-fa...
Insurance should not be positive expected value for anyone; if it is, either the actuaries are doing a poor job, or the product is a loss leader, or there's some regulatory reason the company can't pull out of the market. (Or, you are in a very rare circumstance where you actually know better than the actuary.)
For other disasters, while climate change is "global", the effects are pretty much localized and to various degrees. Some places have had adapted construction to those kinds of blue moon disasters since centuries, so why should they part with more money?
For socialists this is a goal, not an obstacle.
If it's a product you actually want everyone to carry (like health insurance) it should probably be the government offering it.
If low-risk individuals are allowed to make their own choices, they will choose an insurer that caters to their group, thus depriving the government "option" of "premiums."
Just like with school property tax vouchers: if people are allowed to directly appropriate the benefits of their funds, less "desirable" schools would receive less funding.
Mandated government "insurance" is a form of welfare.
Yes? Of course? That doesn't make it a bad idea.
Actuarial science is not often associated with “fun” but they have been partying for centuries.
“In 1662, a London draper named John Graunt showed that there were predictable patterns of longevity and death in a defined group, or cohort, of people, despite the uncertainty about the future longevity or mortality of any one individual. This study became the basis for the original life table. Combining this idea with that of compound interest and annuity valuation, it became possible to set up an insurance scheme to provide life insurance or pensions for a group of people, and to calculate with some degree of accuracy each member's necessary contributions to a common fund, assuming a fixed rate of interest.”
> you can either isolate the LA customers and charge them the "real" price of the risk […] or you can include them in the broad pool
Maybe you don’t understand that the insurance business is based on including everyone in one pool (so it can swallow a large clustered crisis more easily) AND charge them (more than) the real price of the risk.
It’s good when insurers personalize! Install screens to prevents embers from entering roof vents? Great. You should get a discount!
It’s a win-win. Consumers are incentivized to take measures to reduce risk.
You also have insurance companies that will incentivize risk reduction by subsidizing alterations - if you clear any trees within X ft of home, they will give you $1000 towards it.
But yes on the inspections. I’ve had home insurance inspections around electrical and plumbing. They wanted to make sure it was at code as it was an older home.
NOT lining up the premium with the actual risk is what's non-viable.
That's the only way.
> which will be unviable as a business and probably politically touchy too
Why would it be? If you live in Los Angeles - doesn't mean you don't need insurance (even if it several times the cost of insurance in the safer areas).
> or you can include them in the broad pool
No, you can't. Your competitor who doesn't do this will offer cheaper insurance - because they doesn't distribute high risk of small group to everybody else.
> the people with a full-cinderblock home in a non-flammable state pay $20 more a year so the entire endeavour can work.
Why would they do that? 20 bucks is 20 bucks.
> The concept probably works better if you have some concept of social cohesion to lean on
You mean if you with totalitarian governance deprive people of the ability to choose? Yeah, that could work. I mean, that's how the gulags were justified.
Are you saying that we should only pool risk between people in the same risk bucket?
How do you aim to determine the resolution of that risk? Not to mention calculating it accurately?
People should be free to make that choice even though it increases net costs for higher-risk or less-affluent individuals.
> How do you aim to determine the resolution of that risk? Not to mention calculating it accurately?
By allowing private actuaries to make these pricing decisions: skilled organizations will succeed, others will fail.
Ok, I get how you want to value risk, independent actuaries. I suppose, there's some bias there as insurers might lean on them to adjust the risk to be more favourable to them and as they'll be repeat business, they're likely to comply, but let's assume we find some really honest ones.
So given say a pool of people with similar risk profiles, say young professionals in high earning careers, and you calculate that they're effective risk is the same so you pool them together.
Now, what do you believe an insurer would insure them against? And of the things, what would not take them out of the pool they've been placed in and put them into a different, perhaps smaller pool?
It's like how a hair salon owner evaluates the difficulty of a haircut. And generally, when you want to have simple haircut, but they are gonna charge you extra because Jason Statham is their client, and he has very sensitive and delicate hair ends, each of which requires a careful individual approach... You naturally start wondering what Jason Statham's hair situation has to do with your haircut.
Because insurance will cover you even if your house burns down in the first year of coverage, whereas a personal savings account will have only a very small amount of money in it in the first year of home ownership.
That's the whole point of insurance.
I don't know where the idea came from that the purpose of home insurance is for people in low-risk homes to subsidize people in high-risk homes, but it's a very strange idea.
Now the simplest way of doing that is you decide whether someone is "insurable" or "uninsurable" and then for everyone insurable, you define payout criteria and a fair pay in rate (premiums) which is based on your ability to calculate their risk and taking some extra on top for providing the service.
Your skill at:
1. assessing risk correctly as to whether you take them on as clients
2. calculating their risk correctly and mapping it to a price to charge them (premiums)
3. defining payouts in a way that allows you to pay out when things happen to your clients so others trust you to pay out, but not so often that you have no working capital
broadly determine how well you'll do.
You can do all kinds of other complicated things on top of that, but from what I can tell, the fundamental idea seems to be that given those considerations, the insurer pays out, so the fact that someone has a high risk home should be priced into their premiums or they should not have been taken on in the first place.
Now you appear to dislike that people who have different risk profiles are grouped together, what I'm trying to understand is how that works.
For example, in the case of the house burning down:
1. The insurer pays the homeowner out and increases their premiums
2. The insurer pays the homeowner out and places them into a different risk category of people who own similar homes, but have had their house burn down, works out their new premiums, which are now likely much higher as they're in a riskier category and it's likely that population is smaller.
I assume you're arguing for something like 2 to happen?
Or is it something else?
There is no problem with pooling properties with different risk profiles so long as each property pays premiums that adequately represent that property's risk profile.
Do you believe that's not the case? Or that insurers are giving them discounts? Or are the risks miscalculated?
Nothing. It's definition of insurance - selling your risk.
> Are you saying that we should only pool risk between people in the same risk bucket?
I mean, why would people want to be in a bucket with people with higher risk?
> How do you aim to determine the resolution of that risk? Not to mention calculating it accurately?
These are the problems of insurance companies. At the end of the day, the consumer simply chooses the best price for his risk.
And you immediately start loosing customers to insurers that either did the former or left LA alltogether. This changes $20 surcharge into $25 surcharge, causing more customers to leave, causing surcharge to increase and so on.
You almost said it yourself, "The US does a weird thing where insurance no longer means pooling risk". Why? Is it the profit motive or gov. regulation?
My answer: The selective approach of insurance companies mirrors the profit seeking lack of solidarity, which is ultimately incompatible with the risk pooling purpose, insurance companies are justified with.
Free markets have down sides and failure conditions too and only principled gov. regulation can fix it.
> My answer: The selective approach of insurance companies mirrors the profit seeking lack of solidarity, which is ultimately incompatible with the risk pooling purpose
What’s the non-US-centric view? Lloyd's of London is older than the US.
There are many examples that hint to other motivations then simple greed. Over all, cooperation is the foundation of our society.
> In 2020, 79 percent of homeowners insurance lawsuits nationwide were in Florida—even as the state accounted for only 9 percent of the U.S. homeowners insurance claims, according to the Florida Office of Insurance Regulation.
There were some recent reforms in response (HB 837, 2023; SB 2-A, 2022).
Rock, meet hard place.
They're the ones with the money. They can easily guarantee that you buy the product they want. All they need to do is give you less money, buy the product themselves, and give it to you.
But legally, you are allowed to change insurers at any time. They would probably not be allowed to include that as a contract-breaker clause in the loan itself due to free-market-reasons, or force you to take only their insurance to have the loan (we tend to have a few laws about keeping conflicts of interest like this at arms length but I'm not sure about this case). But if insurance is legally required, I suppose they can ask for proof periodically after you leave to terminate the loan.
It's basically the bank just outsourcing a lot of risk to the insurance company (via the house buyer).
A quick google suggests a similar situation in that there's no legal mandate but most lenders in NZ require insurance.
For total loss then bankruptcy might save you money (assuming you have no other assets or kiwisaver; since you still owe the debt).
But part of the contract with the bank is allowing the bank and insurance company to verify/update.
If you cancel your insurance, the insurance company is incentivised to tell the bank since you will probably sign up for insurance again when told to by the bank. I don't believe the banks or insurance have push updates. I would guess banks batch check if insurance is still live annually?
I live in Christchurch and I believe insurance is valuable risk management - plenty of people gambled and lost with Earthquakes. That said: I own an as-is house because I bought a 3 bedroom on 800m2 for $190000 (cheap because you can't get a mortgage for it because it is uninsurable due to subsidence - I only paid land price).
My land is not too bad actually (relatively) - heaps of other insured properties have similar slumping along the river or on the hills.
I've got friends with slumping issues - hidden nightmares for future buyers... In their houses you could feel the uneven floors before the earthquake and the earthquake just accelerated the problem. Pay attention when buying any house in an earthquake zone!!!
My house is actually fine -- only the ring foundation is broken and needs replacing. There are plenty of companies with the skills to do it reasonably, because it is a common issue in Christchurch e.g. a raft foundation.
The property was extremely cheap (less than half price) partly due to another issue - the driveway and front lawn gets flooded by the river occasionally (the house is high and dry).
Disclaimer: I like risk and can afford it.
I sold the house after a while, it was an interesting experiment in cheap living but ultimately it wasn’t great.
Annoyingly I couldn’t insure it because it was thatched, and I couldn’t change the roof because of heritage. The Irish government has screwed over thatch owners brutally.
1. Ability to raise price based on risk. Regulation example: State won't let insurance company modify their fire risk maps. I believe this has come up in central Oregon for example.
2. Ability to drop people out right. i.e. if they think risk of home insurance is 50/50 next 10 years, they won't insure at all.
Same happens in autos. Monitored safe driving nets at most 10-20% discounts. Biggest factor is age, and even then, difference between 20yo and 35yo driver is 38%.
There are no tricks or deals to insurance.
That's because age is both observable and strongly predictive of risk.
This might be reworked to allow for fire resistant designs to be a factor.
but this means the insurance company is mispricing (or is being forced to misprice) the risk of resistant homes.
In theory, when correct pricing happens, these resistant homes should face less claims, and thus the premiums paid on them is high profit margin; ala, the customer is a good one, and the insurer should persue this customer more than another. This ought to results in a discount for said customer's premium, as more insurers vie for this customer over another.
It's a hard engineering problem to solve, but an increasingly urgent one now that these major events are becoming more intense and frequent.
Similar to when I look at causes of death for my age group and can pretty much eliminate the top 2 of 3 causes for myself.
How exactly do you expect these people to adapt? Many live in multigenerational households and could never afford to rebuild their house or move without uprooting their communities to another state.
Why are the victims made to adapt to the atrocious actions of the wealthy and powerful? Maybe our policy discussions should start from a place of compassion and work towards solutions from there.
Math is hard for people, even on HN.
If I could cure it (yes, I'm using that term. It's a debilitating condition and she'd be better off without it) by selling my house and moving hundreds of miles away from family I'd do that in a heartbeat without complaint. All we can do is make the best of things.
(This is not a contradiction of your point, just a useful related factoid for the modern era.)
The advantage of suburbs in which houses are mostly built from non-flammable materials is that while maybe one or two rows of houses closest to forested areas will likely burn out, there won't be enough calorific potential for the fire to propagate further into the suburb.
Also for firefighting efforts the difference between a house burning out and a house burning down is huge. The former means that most of the fire is already contained in a non-flammable structure, reducing the risk of spreading and also making efforts to quench it with water more effective.
"Brick is much worse than wood for wind-stoked wildfires" is a strange take. If a wildfire is approaching, I'll take a town built from brick rather than plywood any day.
Don’t plant trees within fifty feet of a structure. More, if you didn’t inflate your home like a balloon to fill a property to the brim with home. Cut them down and make a firebreak. Clearings exist for a real and serious reason. Aesthetics have been given precedence far too long in this regard.
Make your home airtight (or positively pressurize it, if you have the power and tech to do that safely) so that embers don’t get pushed in by the winds and pulled in by the temperature differential currents and catch your house on fire from inside its walls. Not much fun in having a brick building burned out from embers that were forced in through a poorly-sealed door.
Saturate your roof with water, so that it doesn’t trap embers and act as a fire repeater to the next house on the block. Not only will your roof not burn, but every ember that lands on it will likely go out. Even if your roof is metal, consider installing sprinklers anyways. Maybe you’ll help save your neighborhood someday.
It’s not the building material that’s the one problem here; it’s the carelessness of building code, safety enforcement and absence of federal and state aid to fireproof homes in known fire zones. It’s the catastrophically incorrect hundred year old policy that would rather burn down a chunk of homes every ten years rather than admit that policy is wrong and that the indigenous people were right all along. Brick or wood or concrete or steel, none of these will stop the hottest fires with any certainty. We know what does, and we’ve allowed it to become unsafe to have wood homes. We know how to stop these wildfires. Build with brick if you like, but:
Only fire can prevent forest fires.
https://99percentinvisible.org/episode/built-to-burn/
This is absolutely an acceptable path forward, and was proposed decades ago. It’s been essentially ignored in building codes and homeowner requirements, but if you own a home or know someone whose home is in a fire zone — which is any home between the Cascades and the coastline where there’s a contiguous (no gaps larger than a mile) line of homes and/or flammable unmanaged land eastward from the house to the nearest forest (i.e. all of Marin county) — then focusing on the home modifications described in this story may save that home, and perhaps all of those west of it, when fire visits them eventually.
Have we seen any stone cities burn down lately? Because I haven’t seen London burn down since they replaced all the wooden houses with brick in 1666.
What I thought was worse was once a tornado rips up a neighborhood builders are allowed to build replacement stick framed homes.
Genuine question. Does this story get told to children in Oklahoma, and if so, don’t the children think to themselves “wtf parents, have you seen our house?”.
My main point is that if we face major natural disasters, we need to take action to mitigate their impact in the future. As a foreigner, it seems to me that Americans prioritize building cheap homes over constructing better and more resilient ones.
This is why prices are important - sometimes it's sensible to build cheaper houses without these safeties if the risk isn't there, but if the risk does exist then it needs to be priced right to provide that incentive.
People whine about insurances pulling out. All they want is for somebody else to pay for their risk. It's their choice to live in that area, they should bear the consequences. It's not like it is or has ever been a secret. Climate change is known for decades now. Many people just chose not to "believe" in it. Well, their choice, but now that sh* hits the fan, they shouldn't come whine that everything gets sprayed with poo.
Why do they get to pull out now when it's time to hold their end of the contract?
Everybody who is insured at the moment of course needs to be paid by the insurance under the terms they had agreed to. The insurances should not be allowed to "pull out" of this responsibility.
But what about the next year? If no insurance wants to offer you another term, especially not for those same conditions, then it's their choice to "pull out" in that sense.
I can see an argument for not writing new policies in an area. But I can also make an argument for allowing existing policyholders to renew -- maybe not at the previous rate, but at an appropriate rate for the risk.
As a matter of public policy, we ought to match the risk put on a homeowner with a mortgage by the bank with the risk assumed by the insurer when the homeowner pays their policies. Not let the insurance company lay the risk on the homeowner if they notice the risk has gone up before the loss is realised.
Alternatively, we need to start treating buildings insurance more like (UK) life cover: I took out decreasing life insurance when I took out my mortgage, it'll pay off the mortgage if I die. The amount of cover goes down every year to roughly match me paying off my mortgage. No matter what happens to my health in the meantime, if I keep paying the premiums then I keep the cover -- even if I wouldn't qualify for new cover.
Or maybe we need to say that if an insurance company declines to renew because they think the risk has risen too much, the customer should be allowed to claim on the expiring policy even if the house is still standing, because it's obviously worthless, and it's obviously due to a risk that was covered by the policy.
Your other proposals as extensions to yearly terms certainly go too far. Annual renewal policies are commonplace, and it should be well understood that there's no obligation on any party to continue it.
If we're going to have state intervention though (and it seems at least under suggestion, I've no idea how seriously, in CA) then rather than an insurer of last resort, we (or rather they) should consider what they actually want from their insurance.
But if the state regulator sets a maximum cap they wouldn’t be allowed to…
Maybe they didn't, and then the law or limits were imposed at a time when the insurance companies needed to increase the premiums to match the new risk. But if the law prevents them, then they have no other choice but to pull out. Why would they as a business stay if the risk is to great for the premiums they are allowed to charge? They certainly are not obligated to stay.
But it is possible that more private insurers in Florida, who have to adhere to state guidelines for how much they can raise premiums, will cancel policies after this year’s hurricanes, leading more people to turn to Citizens, Rappmund said. “When you don’t allow the price to be matched to the risk, then the private companies can’t make a business there and they retreat.”
Still, if fewer private insurers want to do business in Florida, Citizens would likely need to push for higher rates on its customers more and potentially even reworking what its policies cover, Rappmund told CNN.
More seriously, nowhere of course, but if the risk is manageable (a fluffy term to mean predictable and not too high) then you'll find an insurance that covers you. Those natural conditions are dynamic though, so where such insurance is available can be (and is) subject to change. Predictably so. Nobody will provide you with the same car insurance when your car is new compared to 40 years later (same car). Things change. If you don't want your insurance to change, negotiate a 40-year term. Forcing them is nuts.
Cars being on the move, makes that distinction much much more relevant
I was fixating on the opposition of goals in the car (if car doesn’t bend/deform, then death risk increases).
Crumple zones in cars exist under the assumption that they will not be occupied by humans. In a house, on the other hand, any place could have a person inside of it during an earthquake, meaning that basically the entire house would need to stand to avoid any human being hurt.
So the human surviving may come at the cost of more houses collapsing.
Plastic/non-linear deformation is intended in shear panels of steel connections and the core of well confined concrete beams/columns. The idea is to provide a lot of energy damping due to the nonlinear nature of the f*D hysteresis curve. This works long enough for the earthquake to go away and the people to get out of the building, at which point, you need a new building but hopefully no one has died.
Earthquakes are different and you'd need a house that stood anyway (though I'd guess most houses don't have a problem with earthquakes insofar as not collapsing on inhabitants, though they'd probably be damaged)
https://en.m.wikipedia.org/wiki/2023_Turkey%E2%80%93Syria_ea...
Did you know the most destructive wildfire in California history, the 2018 Camp Fire, destroyed 19,000 buildings but only caused 85 deaths? [1]
[1] https://oehha.ca.gov/sites/default/files/media/downloads/cli...
If you don't know what a parapet is, take a look up to the roofs on London's older buildings, the front wall rises up past the bottom of the roof. If there is a fire in the building then the parapet keeps the burning roof inside the footprint of the building rather than let it 'slide off' to set fire to the property on the other side of the street.
The parapet requirement did not extend to towns outside London, which makes me wonder why.
The answer to that is to see what goes on in the USA. After a natural disaster they just pick themselves up and keep going. Florida was obliterated in 2024 but nobody cared after a fortnight. Same with the current wild fires, nobody will care next week, it will be forgotten, even though having one's home destroyed might be considered deeply traumatic.
I think that the key to change is to not have too many natural disasters, ideally nobody has living memory of the last fire/flood/earthquake/pandemic/alien invasion/plague of locusts so that there is no point of reference or 'compassion fatigue'. Only then can there be a fair expectation of political will and the possibility of change.
Funny, I would have said the exact opposite. If people forget how bad things were, they seem more likely to repeat them.
Nazism, for one. And the rise in antivax sentiment - people today have never come across an iron lung, which is a testament to medical technology, but it means some silly opinions get way more traction than they should.
"Those who cannot remember the past are condemned to repeat it" - George Santayana
> "Those who cannot remember the past are condemned to repeat it" - George Santayana
I have expressed that idea with different attribution before now, but, on reflection, it is a 'trite quote' that can be trotted out far too easily!
That’s an huge exaggeration. FL was not obliterated in 2024.
Stats:
Total storms 18
Hurricanes 11
Major hurricanes (Cat. 3+) 5
Total fatalities 401
Total damage $128.072 billion
(Third-costliest tropical cyclone season on record)
128 billion dollars is equivalent to 200,000 homes, or even more, which does not represent total obliteration, however, if that level of devastation happened in the UK, the only comparison would be what the Luftwaffe did during WW2.
As of 2023, FL has over 10.4 million homes.
> however, if that level of devastation happened in the UK, the only comparison would be what the Luftwaffe did during WW2.
If you are referring to The Blitz, the numbers I have access to is that over 1.1 million homes and flats were destroyed in London alone.
That’s absolutely nuts.
It’s also a lot worse than the pure numbers suggest because the damage here is taking away actual built up stock, so capacity for generating future GDP. And the GDP in Florida includes a lot of economic activity used to rebuild after past damage.
And all of this without Miami even being flooded out of existence. Miami can’t even build dikes due to the porous ground it’s built on.
I'm here in Eastern Europe and our buildings can withstand a lot of things.
> we need to take action to mitigate their impact in the future. As a foreigner, it seems to me that Americans prioritize building cheap homes over constructing better and more resilient ones.
As an European, it baffles me as well.
If this doesn't happen to "cheap" homes here, why does it happen in California, to rich people's houses?
When state actors even dabble in socialism disasters happen people die.
> In most cases, the Department of Insurance would be required to act on an insurance carrier’s rate request within 60 days, unless extensions are necessary.
> The proposed bill expedites the timelines laid out in Proposition 103, which requires insurance companies to have changes approved by the Department of Insurance and dictates how quickly the department must act on change requests.
> Critics fear that shortening approval timelines will allow insurance companies to jack-up premiums without room for public appeals and sufficient review by the Department of Insurance.
https://sfstandard.com/2024/05/30/california-insurance-crisi...
Obviously. Such a move by the government is just plain stupid.
> When state actors even dabble in socialism disasters happen people die.
No need to overgeneralize. Not every stupid move is immediately "socialism" and everything smart is "capitalism". It's obvious to every socialist that this move was stupid. In contrast, it's pretty clear that a purely market-based health system costs lives. Nobody is claiming though that "whenever societies dabble in capitalism it results in deaths". Pick your optimization target and then the right tool to reach that target. Sometimes that tool is to let prices regulate risk, sometimes it is laws to regulate risk, and sometimes it's something else entirely.
That was literally the take about insurance. And here we are, again.
Is it? Or is this post hoc rationalization? I really dislike playing the “both sides” card, even for a moment, but it’s hard to deny that there are questionable takes on both ends.
I agree with you that not every regulation equates to socialism, and it’s ridiculous to claim it is. However, the narrative of “insurance companies bad” is incredibly prevalent among left-leaning perspectives, and any regulation around insurance premiums tends to be automatically celebrated as a clear victory.
Ironically (because it's a free market argument), it’s a not-uncommon argument that if insurance companies can’t provide their services for no more than some arbitrarily-decided amount annually, they’re being inefficient or greedy and should go bankrupt and let a new competitor take the market.
Perhaps it is, I don't have enough insight to know. It's obvious (to me) that this is clearly over-simplifying things.
> Ironically (because it's a free market argument), it’s a not-uncommon argument that if insurance companies can’t provide their services for no more than some arbitrarily-decided amount annually, they’re being inefficient or greedy and should go bankrupt and let a new competitor take the market.
Is it actually a free market argument? Maybe it's not possible to provide that service at that price point. I'd think that the free market argument is that the price is already as low as possible, otherwise such a competitor would already exist and have outcompeted everybody. Such an argument has other issues though, like inertia, scaling effects, price-fixing and such, all of which are working against a free market though. Which is why a truly free market needs regulation, otherwise it ceases to be free.
> I really dislike playing the “both sides” card, even for a moment
Honest question: Why? I've found that reality is complicated. It's rare to find saints on "one side" and "pure evil" on the other. The truth is often times that there are many issues, many interests, many world views, and typically even more than two sides. Uncovering the truth usually requires avoiding partisanship and have an open mind about understanding the interests of every involved party. That necessarily leads to "both sides" arguments. Not common in hyper-polarized discourses, unfortunately.
You can spot it in this post, too.
> Is it actually a free market argument?
The argument is:
Large corporation A offers service B at price $C. $C is an extravagant amount, and is due to the greed and inefficiencies of A. A can only charge $C because of regulatory capture, or using capital to elbow out upstarts, or whatever other argument you want to assume (ie it's not a truly free market).
If A should leave the market (forcibly or not), company D can now flourish by offering B at $E, where $E is much less than $C. Because D doesn't have the inefficiencies and greed of A, everyone profits.
Seems like a pretty standard "free markets/Econ 101" argument to me.
> Honest question: Why?
Frequently it’s nothing more than a flimsy pretext for cowardice, a lack of knowledge, or simple indifference.
I don't disagree with you, many topics are complex. Generally though, people dislike those who refuse to take a stance even if it's a weakly-held one (thus Machiavelli's famous advice).
Hm I think I see what you mean. It's a free market argument that includes that some regulation is in place which keeps A in business and keeps D out of business.
But wouldn't the free market corollary then be to remove that regulation so the market can be more free? That's hardly the suggestion coming from the left-leaning perspective, which instead proposes to add more regulation. So the end-to-end argument (including s corollary for what to do) doesn't actually sound free market to me.
And it is not exactly "left" either. Rothbard was a right-libertarian, aka. libertarian capitalist or right-wing libertarian.
The amount of walls in Europe that you could punch a wall into is low enough that you shouldnt try.
I'm in Christchurch, 6.2 Earthquake in 2011 and wooden framed houses dealt with it pretty good - they flex - lots of the houses survived and are still used.
Just about anything old and bricky was a deathtrap (fortunately many were unoccupied because condemned after nearby 2010 Earthquake).
In areas where we don't have earthquakes, yeah, what's the problem?
Afaik, only Turkey and a small part of the Balkans is considered earthquake territory. And there's no fracking in Europe to induce minor manmade earthquakes either.
Despite being hit by earthquakes more often than other parts of Europe, usually only buildings and houses not built up to standard or old ones crumble, other buildings just shake and that's it. Of course, I do not know the exact risk of earthquakes in California and their intensity, but it's definitely possible to build earthquake resistant brick buildings
We don't get many earthquakes here though, we do get storm but it doesn't cause power outage at all.
While having unmanaged accumulated flammable brush
While having an empty reservoir under repair
While having the public water source unable to maintain water pressure for multiple hydrant usage
While having too few fire fighters dispatched in the area anyway
While having houses made out of wood
is it an ignorant take when the houses not made out of wood with their own watersource were able to withstand 100mph wind gusts and firestorm? it really really makes everyone else look ignorant
At some point the US really needs to do bit of cultural reform so they can start paying for all that low density development and the costs associated with it. So stuff can actually be maintained.
The City of LA has a lower per capita tax revenue than most large Texan and southern cities, largely due to property tax caps.
In lots of pictures from LA, there are green trees right beside burned out houses. The video in this NYT article is a great example: https://www.nytimes.com/live/2025/01/15/us/los-angeles-wildf...
One of the biggest problems are vents in the eves. Typically these vents have a single screen with a coarse mesh. Embers from fires easily pass through these vents, land on a surface, and start a fire.
Replacing the one coarse mesh with two or more layers of fine mesh significantly reduces the odds of an ember getting into the house.
This is a trivial improvement that dramatically increases survivability.
Notice that you said "Green trees don't easily burn." Coastal California has two seasons: green and brown. Brown is in the summer. Green is in the winer. Normally it rains in LA during December and January. It didn't rain this year, so brown continued.
Most of the fires aren't in what you'd think of as forests. It's chaparral. Low scrub, bushes, and grasses. It is mostly what you'd refer to as underbrush. The only way to "thin it out" would be to remove all the vegetation. This environment has evolved to periodically burn.
> Trees have evolved to survive fires as well.
Trees have two broad strategies for surviving fires. One is to resist fire. The quintessential example is a redwood. The other is to burn and regrow faster than anything else. The quintessential example is a blue gum. Eucalypts evolved to literally explode when they burn. The environment in The Palisades is much closer to the second than the first.
This environment is, by its nature, an environment that burns. Yes, we've needed to allow more frequent burning. Environmentalists have been arguing this for decades. The difficulties with these conversations in the US is the Republican party's actual definition of "thinning the underbrush" doesn't mean controlled burns. It means clearcutting forests.
> These fires are HOT and don't just catch houses on fire with little embers.
Yes, in fact they do spread by embers. This is why the fires jump several streets at a time. The wind blows embers, and those embers ignite further buildings before the fire front even reaches them. This is one reason why it is so hard to set up fire breaks during a high winds.
> The houses could be made fire-resistant, but making houses to be fire-resistant is going to be more expensive
Here's an example things that you can do to increase the fire survivability of your home: https://flash.org/mitigation/protect-your-eaves-soffits-vent...
> and storing more water
LA had plenty of water. It didn't have enough water pressure.
https://www.theguardian.com/us-news/2025/jan/08/los-angeles-...
I’m curious about how many others did that burned down too
But so far the ones highlighted had super obvious mitigations that its astounding to see were not more common
It's all considered disposable, much like strip malls.
"Americans" is doing a lot of work in that sentence.
It would probably be more accurate to say "It seems to me that the history of American culture and economic systems have led to a system whose emergent behavior is to prioritize building cheap-but-easy-to-modify homes over constructing smaller-harder-to-modify-but-more-resilient ones."
Sure "we" need to take action, but the machine is very large and we are all very small gears in it. A twenty-something buying their first house doesn't have a magic wand to wave that will summon cinder block houses into being that don't physically exist. A builder who wants to build cinder block houses doesn't have a magic wand to rewrite city building codes that presume residential construction is mostly wood. A city council member who wants to modernize building codes doesn't have a magic wand to get enough constituents to prioritize this over housing costs, homelessness (but I repeat myself), jobs, etc.
Everyone's problems seem easy when you are very far away from them.
Australia has a lot of experience with building fire resistant homes, and they didn’t do it with masonry, they did it with timber and steel framed homes, plus fireproof cladding and roofing materials, keeping a perimeter free of vegetation and protecting against ember ingress.
It is possible to have both earthquake and fire resistance in a stick framed home, without the expense of resorting to reinforced concrete.
People in built up areas almost don't think at all about wildfire safety, cladding an so on.
ZONING and Building Code need to change.
You're correct that buildings must be more robust and literally capable of surviving an ongoing 4th of July event directly above the property.
However they must also be built such that there is less which is able to burn. Also so that that which does burn is less deadly when it burns.
There also need to be better firebreaks and less natural 'fuel load', which when there IS a good set of rain in the near future, needs to be burned in a rotating cycle to restore nature's fuel balance and discourage catastrophic uncontrolled correction events.
https://nypost.com/2025/01/15/real-estate/passive-house-surv...
Metal roof, passive house so embers don’t get sucked in. Concrete walls around the property and plants that don’t contribute to the fire.
The house might cost an additional $100k to build compared to conventional. But it would make all that back on energy, roofing, and insurance costs- probably at the point the conventional home would need a roof replacement.
Builders don’t build such houses unless a client or building code mandates it.
It seems like a lot of fire resistance can be created just by focusing on defensible space and having a concrete or metal fence. Then protecting the roof ventilation from fire (there are special screening materials that can be bought). Then using class A rated materials on the roof and then the exterior. Then metal framed windows instead of vinyl. Actually doesn't cost that much more- they should require it in building codes in these areas. The issue then is retrofit- insurers should probably require a defensible space in these high risk areas.
It's just a matter of throwing a couple hundreds $ of metal and cement every few rows of bricks, like this: https://www.pointp.fr/asset/27/07/AST212707-XL.jpg when you see how much american spend on houses it's a drop in the ocean.
FYI a two storey 10x10m house will run you less than 10k euros in bricks for the external walls, and that's with 30cm wide honeycomb bricks which probably provide enough thermal insulation as is for LA. Add 10k of rockwool insulation and you're good to go for most places.
You use wood for simple reasons: it's widely available, that's the only thing your workers are trained on, it's cheaper so builders make more money, it's faster and allow crazier design (mcmansions). Same thing for asphalt shingles, nobody uses that, it needs constant replacement, but it's cheaper, easier/faster to install.
In europe we mostly build rectangles with simple two pitch roofs, ceramic tiles that last 50+ years, most of them are made of bricks, even in seismically active countries like Italy.
Europe: https://www.philomag.com/sites/default/files/styles/article_...
US: https://www.reviewjournal.com/wp-content/uploads/2017/10/950...
Admittedly not very knowledgeable about this stuff but I feel like a lot of these types of comments are greatly trivializing this problem
This is an extreme that is not true. Bricks are harder to make earthquake resistant but it's perfectly possible to build houses that have SOME bricks in it that are also earthquake resistant. There are permutations of materials that are both more fire resistant and more earthquake resistant to the required level at a certain height of the building.
Anyways the difference in labor costs between wood and reinforced brick would be massive in LA county not to mention the additional cost of materials.
That was 10 years ago.
It's true that most predictions about climate are wrong - most of the time, they're optimistic. (Not always, fortunately [2])
[1] https://www.leparisien.fr/economie/business/special-cop21-un...
[2] https://www.theclimatebrink.com/p/emissions-are-no-longer-fo...
if it did (which is not probable) happen it'd take until the end of the century
if we were to get there the entire world will be a different place; everything will have advanced so we won't be insuring our present world with our current knowledge and current tech but a future world with future knowledge and future tech
Sure, we could bulldoze everything and build new stuff that can handle a +2C, +3C, +4C, etc... world, but that's expensive.
https://unhabitat.org/news/13-jul-2023/the-world-is-failing-...
> if we were to get there the entire world will be a different place; everything will have advanced so we won't be insuring our present world with our current knowledge and current tech but a future world with future knowledge and future tech
That's a very convoluted way to spell "famine, wars and mass immigration". Techno-solutionism has become a religion, you don't even have to understand or look at the problem, just repeat "tech will save us all, in tech we trust".
"All natural and technological processes proceed in such a way That the availability of the remaining energy decreases In all energy exchanges, if no energy enters or leaves an isolated system The entropy of that system increases Energy continuously flows from being concentrated To becoming dispersed, spread out, wasted and useless New energy cannot be created and high grade energy is being destroyed An economy based on endless growth is Unsustainable"
Evidence? Has anyone collated predictions over time and compared them with outcomes to date?
I can remember a number of specific predictions (e.g. that snow would be unknown in most of the UK by the early 2000s) that were pessimistic. Of course, I recall those because they got a lot of media attention at the time and the media reporting is biased to the most extreme predictions so its not a fair sample.
Surely if plants are absorbing more CO2 than we thought, that's a good thing for climate change? (More CO2 absorbed by plants -> less CO2 staying in the atmosphere -> less warming. No?)
The vast vast vast majority of co2 absorbed by plants remains in the carbon cycle. The share that leaves it is in fact ridiculously small.
There's absolutely no reasonable scenario where we wait for plants to deal with the output of the fossil fuels pumped up.
What matters is accumulation at a particular point in the cycle because CO₂ is added to the atmosphere faster than it is removed. If it is removed faster then it ceases to be a problem.
The errors on consequences of the warming... I'm not sure one can even talk about them without citing specific studies, because those things tend to have undefined timeframes and way into the future contexts (like this 4°C one... is this even possible to achieve by burning fossil fuels?)
The issue in California is not the price of insurance, it's availability because of extremely myopic ballot initiatives that are entirely political in nature. Should insurance be fairly priced, then the market can force people out of uninsurable areas and into areas with far less chance to burn.
Living in areas in constant danger of flooding and/or burning and/or storm wind damage and/or drought seems like quite an eccentrically inconvenient lifestyle flex.
Unless you like disaster movies.
This is like half of the country.
"Each year, on average, 31,000 square kilometres (12,000 sq mi) (around 21% of the country) is flooded. During severe floods the affected area may exceed two-thirds of the country, as was seen in 1998."
https://en.wikipedia.org/wiki/Floods_in_Bangladesh
Most of the world does not want to aspire to be Bangladesh, but humans have been living in extremely disaster-prone areas for millennia because the short-term benefits (rich soil etc) outweigh the occasional catastrophic losses.
And, well, most of the US is just a hanger-on to California's economy.
CA is a huge economy but by no means is the US just CA + 49 other states. Might be fairer to say it’s CA+NY+TX+FL but at that point you’re just aggregating the population.
Other kinds of insurance are no different.
But important, useful things will still be burning and flooding, at huge cost to the economy. Which is less nice.
At this point I think we've tipped into a world of complete delusion, where imaginary "markets" are more important than keeping the planet comfortable, stable, and inhabitable.
Also. this, from that most volatile, irrational, and least sensible of all professions - the actuaries:
https://www.theguardian.com/environment/2025/jan/16/economic...
Lots of societies and civilizations have collapsed. Some were straight up wiped off the earth and we don't even know what happened to them. Western civilization has had a good 500 years, and America has had a good 250 years, but that doesn't mean things can never go bad in the future.
Plenty of places have had catastrophic droughts, famines, and plagues. Nearly half of Europe died a few times from plagues. Most natives in America were absolutely wiped out from disease and other issues. Tens of millions died of famine in China last century. Tsunamis washed away and killed hundreds of thousands in Indonesia and Japan this current century.
In the past, the Krakatoa eruption messed with the climate around the world and made the sky dark. The Bronze Age Collapse is something we still don't understand but nearly wiped out everything in the western world. With population density higher than ever, disasters that match major historical ones would be far more destructive. It's really just been an unusually peaceful few decades in first world countries and people have gotten too comfortable.
Conveniently you selected pre-technology examples. How curious.
Meanwhile the impending global famine(s) - (plural) of the 20th century never came to be because captitalism kept pumping out agriscience improvements to improve crop yields to 10 times what they were in 1900.
Technology has been around for hundreds of thousands of years. What are you defining as "technology"? Software as a service chatbots? Because those aren't saving anyone.
And 227000 people died 20 years ago in a tsunami in Indonesia. They had cell phones and the internet. Is that pre-technology? 50 million died in famines in China in the 1950s. They had TV, radio, and computers. Is that pre-technology?
Technology is just tools that humans make to solve a problem.[1] It's not magic. And in the case of the Japanese tsunami, the most basic technology that humans have had for tens of thousands of years saved countless lives: just building a wall, and making it tall enough to block rising water. [2] But wrapping an entire country in walls is kind of unfeasible. And you can't protect the entire world. We never know what kind of disaster will strike next, and technology to protect us only develops after we suffer the consequences at least once.
[1] https://en.wikipedia.org/wiki/Technology#Prehistoric
[2] https://www.japantimes.co.jp/photo-essay-the-seawalls-of-toh...
Vernacular methods of doing things have been around - without science or rapid innovation. Key point in time was invention of printing press combined with lutheran zeal to read and the western alphabet that allowed unprecedented platform for knowledge transfer. After that it's been pure acceleration.
Before literacy was a major thing (which it has not been historically) knowledge transfer and preservation was based on human to human contact. You could not literally just crank the machine to print out out going edges in a knowledge graph.
I'm not meaning just a few literate people. I mean an entire society capable of reading and eager to create and learn new information.
> Technology is just tools that humans make to solve a problem.
According to a dictionary it's "the branch of knowledge dealing with engineering or applied sciences" / "the application of scientific knowledge for practical purposes, especially in industry" and I would argue it's this sort of technology that enables novel, rapid adaptation.
Applied sciences need science before application. Now - knowledge seeking that sure looks likes science even though it was not called that has been around few millenia - Thales of Miletus, Ibn al-Haytham etc etc.
What is novel in our time is application of science to every goddamn problem on an industrial scale. And the understanding that things can improve. This requires a literate society (imo but arguable maybe), eager to adapt, and pragmatic recognition of what works and what does not.
There are areas that are lacking in literacy and capital. While people in those areas sure enough are able as anybody else to individually use technology developed and manufactured elsewhere, the societies in which they live simply lack the means to apply industrial level technological innovations.
With industrial level technology adaptation it's a whole different ballgame.
Many places in US would be uninhabitable without technology and are thus testaments to the idea that MODERN technology allows survival in unprecedented places. For example Colorado. The place was so arid and unhospitable no one could or would want to live there. But then there came railroads, industrial engineering to implement water reservoirs etc etc and visit Denver today and it's very hard for an outsider to realize they are visiting a modern goddamn miracle.
I'm fairly sure if people can live in Colorado they can live anywhere given sufficient capital is applied (capital being the enabler of applied science and technology).
But in modern, literate society, people think "nah it'll be fine bro" and build houses right up on and flat against the coastline. Then entire towns get washed away.
The biggest mistake modern people make is assuming ancient societies were stupid. They didn't have people sitting in offices thinking up solutions to problems. But the reality is those societies learned just as quickly as anyone else did, and a lot of them probably had a much stronger fear of nature and didn't sit around thinking "nah bro we'll totally survive. we have technology". They knew a tiny mistake meant death. Death to modern first worlders seems like a very out of reach thing. We operate on the assumption we'll live long lives and die in a retirement home.
And Colorado isn't by any means inhospitable. There were plenty of tribes in Colorado before literate enlightened megagenius westerners came along to save the day. It has some of the oldest known towns on the North American continent.[1] Westerners may have at first struggled to survive there with their modern technology, but natives lived just fine in Colorado for thousands of years.
Tibet is a far more inhospitable place. So is Saudi Arabia. But those also have thousands of years of history all without a printing press. Arabian culture even managed to spread across the world out from the inhospitable desert and even dominate part of Europe before the printing press existed. Spain and Indonesia became Islamic before enlightened Europeans went out to save the world and make it "habitable".
My point was it’s false narrative to compare any historical society to a modern industrial one.
Printing press, latin alphabet and market economy were suberb for knowledge transfer. There was no historically comparable system to commodotize and scale literacy.
It’s false narrative to claim european developments were not unique and transformative. That’s just how the history goes. Literacy, capital, binding contract law and science created a heady mix that created a system that now is global standard how societies try to operate.
Large parts of the system came from other parts of the world. The point is not where this happened or by whom, but the point is it happened.
Modern technological societies are able to adapt in unprecedented scale. Regardless of culture or ethnicity.
It would be pretty weird to think this would be a narrative of european supremacy - cultural, racial or otherwise. Europe was an inconsequential periphery and it’s once again an iconsequential periphery.
Latin characters really had nothing to do with it. Western society was built off the lessons learned from those two societies. What separates post-printing press western civilization has been the incredibly rapid expansion (which Mongols also achieved with nothing but horses and bows and arrows). But whether this post-printing press civilization will last as long as Ancient Egypt did (3000 years) is yet to be seen. We've got about 2600 years to go.
In reality that is lot less harsh than Europe before industrial agriculture. Just looking at list of famines shows that Europe was a harsh place to live for stable society.
Think what a modern country would look like with 3M people of which 150K can read. It would not be pretty and Egypt was probably worse. Of course if you can control thousands of people you always have some capabilities which is the reason why we adore their art to this day. But I think one should think "North Korea" what pharaonic egypt likely was like rather than "pinnacle of imaginable civilization". This is not to put down the achievements of the egyptian civilization, but like pointed out, they had lots of time.
Most people anywhere (except the pastoralists ofc) were agricultural labourers before modern farming kicked in.
What makes the capabilities of the current civilization different is a combination of things, some of which are unique this time around.
The major differentiators are 1. Global scale monoculture in knowledge (take engineers from US midwest, Ethiopia, China, Brazil, France, Japan, Finland, Chennai - we all basically can mesh instantly to a product team since tehcnological education is so homogenous). This monoculture was enabled by the printing press and later digital technologies. 2. Insane amount of energy per capita available 3. Amount of capital available including finance
2. and 3. simply were not available before. We can argue all day about merits of education systems of old but you simply did not have this global talent mass on hand. This talent mass is prerequisite so that you can scale capital and technology rapidly on a global scale.
Energy&Capital then feed the machine to give it energy. This machine simply did not exist before. The energy per person in any society was tiny fraction what we can utilize. Similarly for capital.
Japan is excellent example.
a) It demonstrates how long it takes for a society, if it's educated and all around excellent but pre-modern to reach parity with modern societies. I would argue based on facts it's about two generations or 50 years (for Japan) from Perry expedition 1850's to Japan wiping a western industrial nation state fleet to the bottom of the Tsushima straits (1905).
b) It demonstrates this society, when in it's pre-modern configuration lacked things, that it felt necesary to acquire to be able to go head-to-head with societies that had these implemented.
It's this difference between pre-modern,pre-capitalist pre-industrial and modern I'm talking about, why it's false narrative to state "people througout history have been smart and able" as a contradiction why modern societies would be more capable. Because they are. It's not a statement about why some people with different upbringing or genes would be different. That's irrelevant (except up to a point where their upbringing relates to prevalent institutions i.e Acemoglu, "Why nations fail" etc).
I agree we know nothing of how long the current system can last, or will it evolve or devolve. But it's very hard for me to imagine the system going away unless we go full mad max. Because it's not about cultural identity anymore. Who is your king or god. While we live in tumultuous times, Fukuyama was still more or less correct IMO, even though clearly it's not a "end of history" as much as "beginning of new history".
It's about capital, energy, education and markets.
> forgotoldacc: Technology has been around for hundreds of thousands of years. What are you defining as "technology"?
I think he meant "industrial".
Technology is the only thing that can save anyone from that type of situation. Prayer sure wouldn’t help!
Billions would perish. If the luckier rich countries did not get nuked or invaded by armies or waves of endless starving refugees then they would be able to save a good amount of their population. At best world development goes back ~50-100 years. At worst, modern civilization basically ends from the combination of conflict and famine.
is technology helping, or hurting in that situation?
near as i can tell, it is the only thing that could help.
we aso have significant food stores and buffers, and if it was the situation you described it would literally be a ‘drop everything and get working’ emergency. we’d likely do better than you expect.
what else could possibly help besides technology?
But yes, a lot of people would die.
And if a couple billion people (minimum) would be dead if we didn’t do it ASAP, do you think that energy or material wouldn’t be expended at the drop of a hat?
Hell, look at how much energy we expend just to serve cat videos.
People generally respond to sudden, external, visible risks pretty well.
It’s when risks are hidden, build slowly, or are caused by behaviors they consider ‘unsolvable’ and they’ve learned to adapt to that they suck.
[https://www.sciencedirect.com/science/article/abs/pii/S09601....]
[https://spectrum.ieee.org/amp/how-much-energy-does-it-take-t...]
But let’s say we take the upper end of energy consumption multiples between input energy and output energy (kcal), say 120 times. So to feed 1 person 2000 kcal per day, would require 240,000 kcal worth of ‘production’ energy, which at that multiple would add up to 278 kWh per day per person. Signifiant!
Multiply that by the population of the US (345 million), and that is a lot of kWh for sure - 95910000000 kWh. But it looks like national energy usage is measured in ‘quads’. And that is .3 quads per day.
Current US energy production is approximately 100 quads per year, and consumption a bit less than that at around 90 something.
[https://www.eia.gov/energyexplained/us-energy-facts/]
So if we picked the absolute least efficient most energy consuming plants, and grew them in the least efficient type of growing environment, we’d need to drop everything and devote all our energy production to it.
Assuming no rationing, no efficiency improvements (LED lights are quite efficient now, and if we really had this issue we’d of course devote 100% of available production to them!), and no bulk commercial production of simpler foodstuffs (we can make bulk sugars and proteins via bioreactors right now, for instance), it would be terrible but possible. At least for the US.
Countries with more solar production, or colder, would be harder hit of course.
China would be well positioned probably to pivot, and I’d be surprised if they didn’t use it to their advantage. Especially with turning up their nukes and pivoting all their solar plants to making LEDs instead.
India and Bangladesh would be really screwed though.
Everyone would finally think farming was cool again though, so that’s a plus.
But every response of yours is dismissive. And this makes this thread frustrating to read. You answer every reply with more questions and a tone of dismissal. If you know so much about this area, why don't you begin sharing some facts and enlighten us? Dismissing your co-commenter and answering their replies with more questions is not educating anyone of anything!
It would help if instead of answering a comment with questions, you share what you know. So how much is the cost of wiring, installation, programming and making greenhouses in the span of a year? How much copper is needed per capita? What do you know? Tell us!
[Trivial googling shows you $750K to $1.25 million Euros per hectare](https://www.floraldaily.com/article/9574650/half-fewer-order...). At 400 square meters of greenhouse to feed a single human being (a reasonable estimate, lower bound being 300 under super intensive conditions with experienced growers), that's at least $30K _per person_ under the existing constraints of the industry just for an industry-standard greenhouse. You could of course lower construction costs and do the bare minimum, at the cost of a dramatic decrease in yield.
That of course assumes materials and fabrication is abundantly available and wouldn't see an impossibly high rise in materials and service costs if suddenly the entire world were to demand greenhouse construction with the attending demands in electricity distribution, power generation, and the sudden need to turn most of society into a sort of high-tech agrarian population, something that just doesn't happen in a year.
This took me 5 minutes to Google.
I’m not saying it would be pretty, or that people wouldn’t die.
I’m just saying that actually doesn’t sound impossible.
Far more effort than that was expended per person in WW2, and that wasn’t nearly as severe of an existential threat.
Hell, in this case it would be an obvious/visible, sudden, external, non-human existential threat, so would be ideal for uniting humanity on somewhat common grounds.
> This took me 5 minutes to Google.
If this is how you get your information, I doubt what you say can be taken seriously. Not to mention that the reference you quote seems like a random website nobody has ever heard of!
This was a very interesting topic and a serious discussion about this topic would at least include references to bonafide surveys or well established trustworthy sources. To find them takes much more than 5 minutes of Googling. Unfortunately I don't have the time to do that, so I requested that if you know something, you share it here with us.
Clearly you do not have the time to do your research either since all you have to present us is "5 minutes of Googling" that turns up a random source!
> "we are quite good at adaptation in the face of adversity."
And the solution of turning gas into fertilizer requires a free trade system to be reliable.
At best your logic works because people get concerned, and work to solve the problem. Once there is a critical mass of people unconcerned, like yourself, that think we will magically adapt and solve the problem, we're screwed.
Here is a list of all new solutions we need: 1) not insure places at higher risk 2) mass desalinification 3) fix US hot climate grids sparkles and/or place them underground 4) Street corridors to isolate fires in neighborhood 5) Build with more fire-resistant materials 6) Install automated hydrant towers with cameras able to spray water on fire remotely (it's done in Spain on the edge of forests and urban areas) 7) Pass on the costs of maintaining of living in expensive risky areas to the people living there and/or give them benefits to move to unpopulated areas with no risk
1) Not all the world will suffer equally from climate change. The parts that are at higher risk should not be insurable so that new housing will not be built there but somewhere else.
2) The idea there won't be water because it doesn't rain it's ridiculous. We live on a planet literally made of water. We'll develop mass production de-salinification plants and have enough water. We need to keep investing and improving that technology. I think having water artifically priced at a low price won't help the development of the desalinification industry. So water should cost more NOW that we can afford it to reflect the R&D cost of it that we must make to have water later.
5) Hot countries don't tend to have plenty of wood to build with. Forests grow with more rain. Building with wood in Spain and Italy is very rare. LA got his wood shipped from somewhere further out. Let's build with other materials in arid fire-prone zones. Yes it's perfectly possible to have houses that are both more-fire-resistant and more-earthquake resistant.
And then you'll have the brine problem.
If we make it a slurry, perhaps we could use it to pump to unpopulated areas with endorheic lakes like the Salt Lake or Salton Sea, then mine and refine the resulting slurry.[0]
The concern is the brine getting into the atmosphere -- that can likely be mitigated.
It’s desalinated water falling from a massive sprinkler in the sky.
Buildings can be built out of less fire prone materials, and surrounding non native vegetation avoided which feeds fires. This does mean someone can’t live in LA as if they are in a New England country town.
There are bigger Hurricanes in oceans but since no Humans live it doesn't make the news.
Great, now in a storm surge (which is the most destructive part of most hurricanes), you have built an effective system for transferring rising seawater into your urban area!
> and river beds.
Great, now you've completely eradicated the delicate ecosystem that was living there and everything that depends on it.
> Build houses higher.
That is how a lot of coastal houses are built. But now you're more susceptible to wind damage, so you're playing a risk balancing game.
Every time a natural disaster shows up, nerds starting inventing solutions. I love the optimistic spirit behind that impulse. But at the same time, people living in those areas, including generations of civil engineers, having been thinking about this a lot longer than us.
The solutions are known but most either have even worse externalities, or simply take a long long time to roll out.
Any solution relating to housing is particularly slow to ship because, surprise, people don't like being forcibly kicked out of their homes. So houses basically only get upgraded at the rate that people die.
So what about the people who already live there...? Like I'm fine telling millionaires their coastal cottages are fucked, but there's a lot more folks out there who've lived in these areas for generations both because they're attached to them emotionally, and also because they can't afford to go anywhere else.
Like I'm glad your personal wealth is going to let you skate out of the worst effects of climate change (so you think/for now). That is far from a universal experience and "tough choices need to be made" in this context sounds a hell of a lot like euphemistic language for "a lot of poor people are going to die, at least if they're too poor to afford to rent my spare homes."
- Originally Lord Farquaad, emulated by every modern billionaire
Fire risk isn't that new. London famously largely burnt down in the great fire of 1666 and the solution was to build stuff that doesn't burn as easily. It's not really a new science.
If things aren't priced correctly, mayhem ensues. Frustratingly the political solutions to high prices often just put off the problem. Government mandated price fixing, of insurance, rentals, etc never fixes the core problem, only allows it to fester.
Sometimes it's taxpayers losing money, sometimes it's the few unlucky ones being forced by the government - and arguably the latter is worse for everyone as private investment and services dry up because of regulatory risks.
Car insurance became quite expensive. My premium is about $2,200 / 6mo (no accidents, no speeding, no claims in about 10 years) for two cars and two drivers. For some reason, 80% of people choose to park outside while they have a 2-car garage available. Usually packed with crap. They find it easier to have their cars totaled every 4-6 years.
For home insurance, my policy is almost $4,800/yr now! While making some coverage adjustments, I noticed that my insurance company no longer offers a choice of lower deductibles for hail/wind. It’s a fixed percentage relative to my property value, currently showing as nearly $15k as the cheapest option. That’s more than 50% of the replacement cost! (I know that because I had my roof replaced twice in the last 10 years.)
I live in a similar climate where hail and tornados are both a risk, though hail is a little less likely here than where you are.
Admittedly we have cheap cars, but our car insurance for two drivers is closer to $850 for the year (full coverage with a reasonable deductible).
Insurance costs have seemed to adjust to a combination of more severe weather conditions, but they also have to fix much more complicated and expensive cars today too. A simple fender bender can be thousands to fix, heck I recently heard about a $5,500 bill when a newer Ford got water in the headlight and fried pretty much the entire electrical system.
https://www.kbb.com/car-news/average-new-car-price-flirting-...
As an insurance buyer, in a hypothetically ideal market situation, you would want all those who also purchase from the same insurer to have the lowest risk of needing an expensive claim paid. The lower the expected payout * risk of disaster means lower premiums for the insurer to still make an expected profit.
I think what will happen is simply: Houses are built in places which are more insurable, existing danger-prone houses will exist until they are destroyed, until then they will increasingly be status objects for the elite who can afford the loss and have inaccurate risk appraisal. The fact that so many valuable objects are kept in Malibu/Palisades homes despite fires happening there a lot (as recent as 2018) indicates homeowners in disaster-prone areas aren't acting perfectly rationally.
I'm not convinced that that's true, and even if it is a huge chunk of population (world, US, pick your area, it applies broadly) keep fighting to regress us to these periods.
People complaining about rules they don't understand is in some sense as old as the existence of rules, but the internet has dramatically increased the number of people who consider themselves experts on politics, healthcare, construction, electrical code, and every other topic on the sun, and who are proud of ignoring the science and the rules and who go out of their way to avoid permits, inspections, etc.
At the same time a significant chunk of the population works to defund and defang all government, preventing the existing rules and codes - labor protections, fire protections, food safety protections, etc. - from being adequately monitored and enforced.
So you have a huge mix of things which are old and degrading, things which were never built right, and things which people are actively modifying in dangerous ways. People have a false sense of confidence build during the years where we were enforcing these rules; I do not believe that confidence is still warranted.
This isn't helped by actual bad rules and regulations on the books. Some minor examples are the prop 95 warnings on every damn thing or the way CAFE standards work to encourage the sale of more pickup trucks. I don't blame some people for wanting to scrap the whole regulatory system after encountering enough of these.
You should. Just because something is imperfect doesn't make it bad. Should the truck loophole be closed? Yes. Has CAFE improved every other class of vehicle? Yes.
Regulation can used to save lives and improve outcomes, but it can also be used to suppress competitors or favor a particular business practice and stifle innovation.
Would some places have become what they are today had they not built their subway system when it was opportune or hilariously less expensive than it is now? The good things we can iterate on or refactor now would have way more overhead to build from scratch at todays standards, not all of which are inherently useful or justified. Sometimes a whole city burns down or all the labor was forced, which sucks and we don't want, but sometimes you're having to get shadow studies done to build anything higher than a bungalow
The thing is that with the additional cost of climate change, a lot of these houses do not have the capacity to go through a once-in-100-years event, as they start to occur more frequently.
We just had a water backflow from the city main pipeline last August. Pretty much everyone was impacted, and insurance cost went up for those that were not impacted anyway.
So to make the house insurable, it requires: 1) massive city infrastructure rebuilding, and 2) everyone pays a lot more to install additional "modules" in their houses. For example I already have a backflow valve but if things get worse and water starts to accumulate close to the bottom of the house I'll need a very expensive French drain, something like 60k CAD. It's not going to break me, but it's 3-4 years of saving.
I can't imagine what happens if we get another once-in-100-years storm this summer. I'll probably leave the basement bare without floor and won't bother to claim it.
it’s ok if insurance is expensive - let it result in the insured goods or services having a serious price adjustment.
rather than price controls a slightly better solution would be just to nationalize insurance and force everyone to use it, but even that is not really a solution since highly correlated events are the antithesis of insurance.
It's a "Do we want cultural extinction or a relatively comfortable and habitable planet?" problem, which is not quite the same thing.
No amount of faith-based "We will adapt!" is going to make an impression until evidence appears that we are actually adapting in real, tangible ways.
Clearly, objectively, and empirically we are not. We are doing the opposite - pretending to ourselves the problem is going to be solved by continuing with the same mistakes which caused it.
the result would be people not living in areas that a risky, engaging in behaviors or risking, or partaking in things the contribute to the world becoming more volatile.
Insurance costs rising are a good signal, but they're essentially a way to tax normal people for the faults of governments and major companies. It does reflect the real risk, but it's not like the fact of people living in most of these areas is the reason the area is risky.
But it's a great way to deliver the signal that '(Climate) RISK IS INCREASING' directly to the voters. If the government socialises the losses, society won't learn the harsh lessons about our changing world quickly enough.
The same people who have the power to fix it always have and they've almost always taken the easy way out. The few times anyone's tried to do real changes on these issues, the other externalities of the changes has usually led to voters rejecting them.
Long term, sure. In the short term, the rapid rise of housing prices combined with the increased rates and severity of disasters means the extra monthly cost would be enough to price a number of people out of homes they purchased when rates were much lower. While it's easy to say, "They should just move," that has huge transaction costs. Aside from the obvious things, which are already substantial, consider the cost of paying off a mortgage taken out a few years ago and acquiring a new mortgage at current interest rates. That can cost you hundreds of thousands of dollars (which shows up as now only being able to afford a much worse house, probably in a much worse location, if you can continue to afford to own at all), and you are basically gifting that money to the bank by paying off your loan early.
You can understand why such people would be willing to take a chance on not having insurance rather than incur a definite loss, and why it might be tempting to try to come up with some other solution than just unleashing the unrelenting might of the free market on them.
When you distort risk pricing, you distort the market, and if you do it hard enough for long enough, you are basically pulling back the slingshot.
While this also applies to mutual insurers, my philosophy is being serious about solvency is the best way to know if you are properly underwriting and pricing. I feel like the government operates too much knowing that they can backstop it either themselves or by imposing an assessment on the market.
You are right that the really big disasters are very correlated events. While not a silver bullet, reinsurance and other risk transfer stuff can help smooth those kind of events out. The good-ish thing with those risks is that while they are uncertain, they are sort of identifiable, known unknowns in Rumsfeld parlance.
I agree with that sentiment, the thing that always seems crazy to me is that California's housing pricing in the face of all these things, but perhaps it's sort of pick your poison. Like I don't want to harp on it, but the only implicit or explicit thing everyone appears to agree on given the decisions that have been made is protecting housing prices above all else. But don't expose people to the ramifications of the housing appreciation (Looking at you, Prop 13).
I don't want to detract away from those points, but it's definitely worth saying that, at present, we're polluting CO2 into the atmosphere at a very large and to some extent avoidable rate. Climate change is already happening, but the extent to which it happens is still down to us - we can and need to do lots to improve flood resistance in, say, Florida, but we can also stop parts of Florida ending up below sea level too.
One obvious reason is rent hikes.
But as one of my favorite local bars was closing, one of the staff mentioned that insurance was really starting to kill them.
We don't live in a flood-prone part of NYC, so I'm curious: is insurance for retail space really going up dramatically across the board in NYC, or was this a single, subjective understanding of a situation?
https://capitaloneshopping.com/research/shoplifting-statisti...
https://www.thecity.nyc/2024/02/21/shoplifting-surge-nyc-sma...
https://nypost.com/2024/05/20/opinion/nyc-crime-wave-continu...
Like requiring buildings be built to a standard where they can survive normal weather events, not building in disaster prone areas, not building in sprawling huge developments that eat up a ton of natural space and create a huge urban woodland interface, and trying to slow the pace of climate change by not dumping so much co2 into the atmosphere.
A similar argument works if insurance is just based on reconstruction cost, but construction costs inflate faster than incomes.
If properties become unaffordable, then to restore equilibrium, property prices must fall, incomes must rise, or lower-income residents will sell to higher-income purchasers. If there are few higher-income purchasers, property prices will fall.
Property taxes could be cut, or decoupled from property values (e.g. poll tax), but that never happens.
If the risk really is high, there is no practical insurance available, and all purchasers are rational, then the price may go to zero.
An example of an irrational purchaser would be one who assigned high status to a beach house, even in the face of threats from coastal erosion, hurricane floods or tsunamis.
> Property taxes could be cut, or decoupled from property values (e.g. poll tax), but that never happens.
Couldn't the total property tax take be set to be proportional to incomes, shared between households in proportion to property price?
> If the risk really is high, there is no practical insurance available, and all purchasers are rational, then the price may go to zero.
Rational purchasers might reason that:
1) they need a home
2) unless they own a home they'll have to rent
3) even an uninsurable home could be expected to be habitable for a while
4) if rent for the duration of expected habitability exceeds transaction costs and property taxes for some uninsurable home, it could be worth a nonzero amount
According to this idea, we pay taxes, and in return the state provides order, protection, and all the blessings of civilization.
Presumably included among all those taxpayer-funded civilizational “services” provided by governments one can find “fire suppression.”
But, you wouldn’t know it from watching tens of thousands of residents flee their homes in southern California and Los Angeles County as fires rage. As of Wednesday at midday, five different fires in southern California are still zero-percent contained. Nor is this some hard-to-reach rural area with few roads and little infrastructure. These fires are right in the middle of suburban cities and towns. Yet, it is all apparently too much for lavishly-funded government agencies to handle.
Indeed, government authorities in Los Angeles County and California had neglected infrastructure to the point that it became useless in many areas in terms of battling the blazes.
The government needs to just stay out of 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.
Yes, but lots of people won't be consider all factors when buying a house.
Prices are high, houses aren't on the market long, when you do find a house that matches your criteria, are you going to consider if it's safe from floods, fires, earth quakes, etc?
You're already factoring in schools, distance to work, shopping options, etc.
Not to mention the fact that you're mostly worried about whether the house has mold, termites, pest, or construction deflects, how long time to the roofing need to be replaced.
Asking normal people to factor in natural disaster probabilities is difficult.
Maybe, it's better to not allow construction is such places through zoning.
I bet most home buyers spend more time looking for pests, mold, leaky pipes, etc, than they do investigating wild fire risks.
Basically you are saying "i want a nanny state".
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.
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.
You can only ignore the reality of government interference in the insurance market for so long.
California is not very hospitable on its own but with human intervention it was made liveable. But that is now running out, because e.g. the water supply is no longer adequate for what is used.
But this is the difficult situation we find ourselves in; due to climate change, hospitable areas are no longer hospitable, and while you can throw money at the problem, it becomes exponentially more expensive to continue to live there. If this continues, it will trigger a (mass) migration. This can be applied everywhere, and the phrase "climate change will trigger mass migrations" has been uttered many times already. It however feels like people only considered this to be a problem in e.g. the global south, affecting poor people because they don't have the financial means to shape the earth and their living conditions by throwing money at the problem.
I live in the Netherlands that for hundreds of years has thrown money and resources at the problem that it's below sea level and prone to flooding. We're still managing, but still get flooding in some places due to e.g. heavy rains deeper in Europe. But if the sea level goes up enough, either we'll have to spend billions in building higher sea walls... or abandon regions entirely. The worst case predictions mention a 2.5 meter sea level rise by 2100, that'll definitely test our infrastructure to put it mildly.
(this comment was a reply first but moved it to a top level one because I added my main article comment as well).
When you put a minimum on the price of wages the true minimum is zero. When you put a maximum on the price of insurance the true maximum is 1/0.
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. :)
1) Maybe there needs to be some adjustments to how risk pooling is done. I live in Florida, so my homeowner's insurance is ridiculously expensive, but my property isn't really at risk from hurricanes etc, being very far inland. Realistically my property isn't any more at risk of anything than any property anywhere else in the country.
2) There doesn't seem to be enough flexibility in the offers. Most people seem to think insurance should cover any losses, but really people only need insurance to cover losses that they cannot recover from. I'd take a $100K deductible on my homeowner's insurance if it was offered and lowered my premiums significantly, but it's my understanding the law won't allow that.
Key insight here. Insurer of last resort == bag-holder for negative EV proposition.
I'm not sure what the answer is here other than forcing insurers to insure (which would raise premiums for everyone), or creating meta-insurance of some kind (insurance against becoming uninsured).
Would you want to hold collateral that has a high risk of becoming worthless? You would effectively be self insuring it and would have to price that into a loan you offered.
Of course not, the problem is that all parties were a-okay with the purchase in the first place, and the banks are trying to change the terms when they realize their hand is a losing one after many turns of the game. Sometimes that’s life, and the corporations should be forced to lose instead of changing the rules so the homeowner loses instead.
The bank is actually the loser here. Property becomes uninsurable, they still hold the collateral, and the borrower can simply walk away on a non-recourse state like California.
There are some areas like CA where natural disaster risk can be mitigated through forest management and I think those places will continue to grow, but for places where we can't do anything to impact a natural disaster (ie hurricane's in florida), those places will start to have "off limit" zones for any type of insurable construction. These places will still be accessable, we will just build parks, beaches and other things there for the public, just not homes or commercial structures.
I think a big part of why natural disasters have gotten so bad is one climate change but also the fact that we're building places we shouldn't and in the future most will learn the lesson to no build in a certain area unless they are made of money and are aware of the risks of building their.
1. The state who sets insurance price caps for political expediency, basically to increase house prices (because they'd go down if insurance prices could float freely). BTW we have examples of areas that are uninsurable like the Florida Keys;
2. The homeowners who want their house prices to go up and want to pay as little as possible for home insurance; and
3. Insurance companies who can't write too many policies so they remain solvent. Price caps ultimately lead to insurers leaving the market.
LA in particular has competing problems: wildfires and earthquakes. If you want to avoid total loss due to wildfires, first you wouldn't build in Pacific Palisades at all. It's a vegetation rich area between hills with potentially high winds. If you want to avoid fire loss, you would build out of concrete not timber-framed buildings.
But the problem is that earthquakes have the opposite building priorities. Lumber is actually quite good in earthquake zones because you tend to get less loss of life from the collapse of timber houses.
Now you can build concrete houses that are earthquake-resistant (eg in Japan) but it's expensive.
Ultimately all of this comes down to a malaise brought on by high house prices. Voters consistently vote for policies that increase their house prices with absolutely no concern for the externalities.
If it now costs $1 million to build an "average" house, then you're going to be spending $20,000+ a year on insurance. If your house only cost $100,000, you wouldn't have that problem.
It's even worse in California because a lot of property taxes are capped so the state government can't even recoupe taxes from a lot of high-priced property but they suffer the costs of it (eg by being the insurer of last resort).
It's expensive here, but is it expensive in Japan? Here its' expensive because it requires extensive steelwork which takes you entirely out of the domain of rubberstamp building approval and into needing PE-stamped bespoke engineering and also gets overbuilt to a greater degree.
Options are wood again, or steel and concrete.
Why is it always whataboutism with earthquakes when presented with "don't build houses out of matchsticks"?
I’ve never seen a house in Europe that was engineered to the M8.5 earthquake standard that is mandatory where I live in the US. They used to construct houses like in Europe but they kept getting destroyed in earthquakes and were made illegal for safety reasons.
European houses are not designed to withstand American disasters. A brick house that can survive a M8.5 earthquake, which is the safety standard where I live, will be almost purely steel structurally and very expensive to build. The brick would be decorative, which can be (and is) done on a wood frame.
Then you have to consider how quickly development took place by comparison, and the collective degree of certainty among the original buyers on whether or not they would be able to afford to stay very long anyway.
So many come there just to give California a try since it's supposed to be the golden state, who are depending completely on the occurrence of good fortune within a limited amount of time before they would expect to return to states with less-expensive hometowns in mostly less fire-prone environments.
This would influence what kind of home they would expect to be suitable for their needs to begin with, and how long it might need to endure.
Fuel is not guaranteed, but renewables, batteries, heat pumps, EVs and possible nuclear does increasingly give us a technological option for ensuring power.
It's fair to ask if economics will drive us to adopt these technologies on a wide enough scale before we run out.
At least most of the year, depending on where you live.
Yes, nuclear would be great, but the time to make that decision was 20 years ago.
- $350 annual bonus to the 67,000 employees?
- Lower the cost of the 91 million policies by $0.27 per year each?
- Cover an additional 50 homes in California?
Where should it go?
I'd run that company well for $250k/annually + benefits (an enormous amount of money).
I hope they aren't investing that capital. AFAIK, insurance capital needs to be liquid, for it to be ready for a payout.
You still didn't address my point is that $25m/yr is a drop in the ocean. "investing $25m properly" will have zero impact on the business.
His pay was 0.39% of the loss. Still a drop in the ocean imho.
Should he have been paid less ? Or more? I don’t know.
But what I do know is when people get upset at stock buybacks or CEO pay, the act like if the company didn’t do these things the company would be drastically different.
Honestly, no one would care about CEO pay if the insurance companies would just pay out and make customers whole. Instead, there are mechanisms and processes in place to keep premiums coming in and to reduce or refuse claim payouts.
But that doesn't mean that the concept may still be valid for the end user in a way or another, just that in the other end you may have a different kind of actor or mitigation of risk. That those events become far more common is not random or an act of some god, i.e. taxes for fossil carbon usage or other economic action towards those actors meant to have a fund for those cases. Or having a personal saving plan instead of giving that money to someone else, that in average may work better for most. Or force insurance companies to keep playing even when the odds are not so extremely favourable for them.
Add to that the general rich mans disease of building anything in America being slow & expensive, so each rebuild is more expensive than the last, well beyond just inflation.
Destroying the wetlands to build houses closer to the ocean has eliminated the natural hurricane protection (from storm surge, at least) that many low lying areas had.
Building into fire-prone hills outside of cities in Southern California was never going to end well.
At least for risks like wildfires, we can reduce future risk by rebuilding homes using wildfire resistant techniques and materials.
The problem in LA (exacerbated by the climate-change driven conditions) was that most of the burned neighborhoods were built adjacent to fire prone wildlands during an era when homes were built like matchboxes, almost designed to burn. Add the hurricane strength wind, and each building became a blowtorch.
Fiber cement siding, minimal eaves, and metal roofs are straightforward ways to reduce wildfire contagion risk of buildings. There have been numerous experiments done to demonstrate how effective this approach is at significantly reducing combustibility of buildings.
Cutting back trees near houses to create defensible space is also pretty straightforward.
The business insurances are in is a business of statistics. As long as you can model things giving you an expected value and a standard deviation, you can offer an insurance policy which gives you X amount of profit with Y amount of risk, and the insurance premiums are adjusted such that the insurance's risk for negative profit is negligible, according to the model.
What does it mean for climate change? Current insurance models apparently don't work well, so they don't dare to offer policies in certain areas. But just like city planners need to adjust (build further away from shore, higher up, build in flooding protections) and home owners do (AC, think twice if you want a basement) and farmers (choice of crops, irrigation systems), so do insurances by finding better models that allow them to have better statistics.
My expectation in the long run is that insurances will be offered again, but with so high premiums for certain areas (of high risk) that it will just be too expensive to live there. Which is fine. Nobody lives on the moon either. And the public shouldn't be paying for somebody's privilege to have a nice waterfront property in a hurricane area.
TL;DR: The current public discourse about this topic conflates predictability with cost when talking about "insurability". They are very different things.
Why is climate change a problem for basements? Is it to do with flooding? If floods are likely to affect basements, doesn't that suggest an opportunity for sacrificial basements?[0]
[0] "The construction of concrete ground structures or sacrificial basements is a recognised solution for construction in areas of high flood risk. The habitable spaces are raised a minimum of 600mm above the level of design flood risk, while the basement area can provide additional nonhabitable storage space." https://www.basements.org.uk/TBIC/Building-Legislation/Plann...
They would spread leaflets/internal publications on "Risk Profile for the Year 20##" every year. And they would issue updates every Q or H.
Insurance companies monitor every-little-thing. If it hasn't rained for X days in Z country, they KNOW IT, monitor it, and accordingly change policies, premiums, etc.
I always tell people that the most lucrative job (imho) is "Actuary" (https://en.wikipedia.org/wiki/Actuary) so for anyone who is young enough to make a career change or have kids on the verge of picking directions/professions, "Actuary" for-the-win!!
Losses are very much in line with asset price inflation. If a house rises in value for no good reason other than loose monetary policy, so does the compensation. At the same time, insurers struggle to find safe yields to match these cost increases when that same monetary policy keeps interest rates low.
Looking at the chart pictured, one would expect that extreme weather events have increased dramatically after 2000, but that is not the case:
(1) The author tried to get homeowner's insurance, but was denied because their home was a significant hurricane risk
(2) The author (maybe?) got insurance through a state-run FAIR program, but then cites news reports that these programs are close to insolvency (As are a significant amount of non-state-run homeowner insurance programs).
(3) The author is like, "well, if it's so hard to insure my house, maybe I should think about living somewhere else." And then generalizes to "a lot of places should be uninsurable and uninhabited - apocalypse here we come"
So what's stopping insurance companies from inventing some kind of fractional insurance? I.e. if insuring a 200sqm house at real rates would be stupidly expensive to anyone but the top 5% wealthiest owners, then instead of quitting the market, why not create a policy that insures the whole house but covers only N sqm from it, priced at real rate / sqm, and it's up to the buyer to decide on N? This way the wealthiest would still have access, everyone else would sort of have it on paper, but it would create space for innovations (and "innovations") in figuring out how to cover the whole thing for regular people - and long-term, incentives for better building and moving elsewhere.
Markets have powerful mechanisms for changing peoples' behavior, but don't work at all in binary "take it or leave it" situations.
Nobody's quite sure how much of it is the extended time not driving, knock-on effects of isolation, or something else [0], but it -is- something insurance companies are paying attention to from various angles.
Another factor less noted, is the challenge of insuring various parties against 'nuclear verdicts' [1], at least as far as 'is the world becoming becoming uninsurable'...
[0] - Could be anything from Visibility of Full-Size SUVs/Trucks, changes in policing of speeding, increase in vehicles with HP/weight ratios outside of experience range, long COVID, the answer isn't fully clear...
[1] - Basically, a legal gap where certain states don't cap judgements such that, in the 'intended reason' allows a clear historical negligence to increase damages, in the less than intended reason you've got lawyers going on fishing expeditions to raise their claim amount... IDK how I feel about it but am giving my understanding.
Does/Why would the insurance assume the subsidy is for people rebuilding in the same place? Money is fungible and so it doesn't need to be in the same place, at all. What I'd expect is that insurance for those hard-to-insure places would skyrocket and thus a new balance would be achieved.
Now that the physics of insolvency are starting to overcome political pressure of keeping Daddy Bailout-Bucks around, and people are whispering "managed retreat" without actually being able to say it outloud around polite company, we are starting to see programs like "we'll make you whole in case of a flood, but you aren't allowed to rebuild on the lot if you take our payout". But those buyouts are often met with yells of "government is taking my property!" because again, no one wants to face the stark reality of managed retreat.
I know politics is famous for elites abusing it for their own benefit, but sometimes the population is truly not ready for something that the elites understand is utterly necessary and that's not a bad thing. The risks and benefits of an elite class, I guess.
I have observed new owners do things like build open sided barns (which legally aren’t a building). Other owners live in camper trailers on the property. One just finished building an (illegal, obviously didn’t get a building permit) property up on stilts (which will get washed away if any serious flooding happens).
On the plus side, this is all not insurance and not mortgageable, and also won’t survive being sold to someone else, as no title insurance would cover these structures and a mortgage lender would require they be torn down first.
In health insurance they don’t cover the elderly, and until Obama they did not cover people with prior conditions.
For home insurance they don’t cover flood get your are mandated to carry one if you have a mortgage.
In life insurance they do not cover you if you have a disease.
It’s more like a lottery rather than insurance.
When you become uninsurable yourself, all you're doing is crossing an imaginary line that has always been there, and kept in imaginary condition precisely to insure that your mental health is stable enough to keep on paying more than anything else :\
You're not supposed to notice this.
Whether or not you crossed that line due to any fault of your own, or from the line moving past you with a whimper or a whoosh, you're also not supposed to be able to tell the difference until it's too late.
Working with the big ships that are often covered by some of the most well-established insurers in the world, it turns out that when you really need them to pay a claim, the stronger your insurance company, the more likely their lawyers will outmaneuver yours, and the claim will not be paid.
Otherwise it could be paying the claim but denying further coverage which the limited number of alternative underwriters can also deny. That's a hell of a negotiating position.
I've read that once more than about 5-10 house were on fire, there was really no hope of containment, due to the orientation of the streets relative to the wind, the proximity of houses, and the intensity of the wind. Thus the key is prevention -- not letting the wild land fire get to the first 5-10 houses.
If insurers were publicly-owned and publicly-operated, instead of being profit-driven corporations, then maybe being "uninsurable" wouldn't be such a common phenomenon.
People reduce or stop caring when they know insurance will cover things. In my opinion this leads to higher losses and higher costs. Especially when people choose more expensive things.
There's two options:
1: Pay people to leave, perhaps 80% of the fair market value as of a certain date.
2: Pay people for their loss, but do not allow them to rebuild. (Unless the house is built to stricter standards, and meeting those standards might not be covered by the loss.)
So my question is: is it even possible to insure against these events — e.g. hurricanes, forest fires, earthquakes — given that all insurance takers may need to collect compensation at once (in which case the price of a house insurance would need to be at least the same as the price of a new house).
It's wild how people here have blinders and think that these things only apply to "lesser" countries.
Punks feelin lucky are advised to Google (or ask any GPT about) "insurance paradox".
Haha
The US has been pioneering other construction techniques using welded steel plates instead of reinforced concrete. They have excellent seismic resistance and are much cheaper to build because you don't need to place rebar.
"tornado outbreaks, high wind, hailstorms"
So most of this cost is roof damage. Which is an area rife with insurance fraud and getting worse.
Easy enough I think to solve.
IMHO we should be seizing the fossil fuel companies' assets and using them for disaster relief around the world due to the catastrophe they have deliberately caused.
The talk about insurance rates is a deliberate distraction.
I saw an article on npr [1] which basically agrees with the chart on the blogpost. I 1980, there were 3 disasters a year that cost $1B, inflation adjusted. In 2024, 24. The second chart in the npr article is pretty terrifying.
[1] https://www.npr.org/2024/10/08/nx-s1-5143320/hurricanes-clim...
But insurance is one of the best signals we have to true risk/consequence/likelihood, which commercial interests pay attention to
The best long term outcome here would be rebuilding safer but the downside will be "which excludes the poor" -that's where I think state and federal policy should apply the lever: require socialised housing outcomes.
Price controls on insurance forces socialised losses. Better is some middle ground: mandate insurance, demand adequate mitigations and defences. But losing the price signal is bad.
I didn't say we shut off all the gas pumps tomorrow. It will obviously take time to transition off. I said we seize their assets and use the proceeds for climate relief. We can keep the revenue coming and using the profits for disaster relief while we transition off fossil fuels. It's not that hard to understand.
Yes wildfires do happen in nature. No this is not normal for this area. Yes it is about climate change. Stop believinf fossil fuel company propaganda.
And if those companies don't find other things to do (they'd be quite good at geothermal, or durable carbon sequestration, with all their drilling and fracking expertise), then they'll go bankrupt without needing to do anything so extreme as nationalizing/seizing/whatever.
Ironically there is a great case that varrious environmental groups that vigorously opposed controlled burns are among the greatest proximal human causes of the current situation. If careful analysis concluded so, would you support seizing their assets for use as disaster relief?
Stop trying to distract with fossil fuel propaganda trying to distract with everthing else they can. Yes controlled burns still happen but it is also understandable that people would be jumpy about them with the problems fire has been causing in that area in recent years.
https://yaleclimateconnections.org/2025/01/the-role-of-clima...
Essentially they fit a logistic regression of climate measurements the amount of area burned by wild fires each year in the forested parts of northern California to try to express how much is burned as a function e.g. of humidity, temperature, max temp, rainfall, wind, etc. Then the took historical weather data and eliminated the trend in order to try to construct an alternative time-series without human influence then their apply their aforementioned coefficients to figure out how much fire would be had in the counterfactual climate conditions.
To their credit (or perhaps their reviewers credit) the paper does observe the most obvious flaw the wildfires don't work that way-- that fuel builds up over time then is cleared by fires and once an area is burned it can't burn again for a long time. While the structure of the model is such that that if the air gets dry enough it will tell you that will constantly be fire everywhere forever no matter how much has already burned. They constructed a number of dynamic models that attempt to account for that and the increase largely disappears, with a constant level being shown for the next decade. True that the dynamic corrections seem even more adhoc (they don't seem to have data that allows them to fit the dynamic parameters), but the model that ignores these effects is pretty obviously wrong in a meaningful sense.
Even without that correction, their model doesn't fit the last ten years of data with many times the number of acres burned than the model predicts.
Their approach also has the effect that if run on the data from the first third of the study or so, it would instead result in claiming that climate change was reducing wildfires. (because wildfire acres burned were decreasing over that period)
More fundamentally, you could instead run the same analysis using any other measurements that increased over the same period that wildfires in the region increased and the model would come back attributing significant levels of wildfire to it. E.g. plugging in metrics of internet traffic growth into it looks like it would probably work even better. (See also: https://www.tylervigen.com/spurious-correlations )
People keep wanting to live in huge space that they barely use, then buy a fuckton of appliances they use once or twice a month at the maximum and hoard stuff like there is no tomorrow. Then they cry when they lose everything or that nobody want to insure their pile of crap. Just insure the minimum to live comfortably. It is much lower than what you can think of.
Since I have been moving every 4 to 5 years I have been focusing on never hoarding too much stuff. My appartment can burn, I will be fine and as long as I can find a small roof[1] for me and my family (1 partner 2 teenagers) and we could buy back what we need to live comfortably with less than 10k€ and then rebuild gradually to live in a normally sized[2] appartment/house.
[1] by my standards, which I rate at 20 to 25sq/m per person living in the household.
[2] a bungalow, yurt, caravan or large camper would be enough for a disaster recovery.
Yes, that's a normal human response. It's ok to have emotions.
No. Even if they had homes in Malibu, the ones who caused those situations would not have lost everything.
Insurers are strictly regulated at the state level. They have to keep enough reserves to pay a surge in claims. And they have to collect enough premiums to pay out an average claim volume, or else the state requires them to shut down.
This hits hard and close to home. While my heart goes out to everyone that’s shouldering misfortunes, I’m wary of the “private profits, public risks” phenomenon getting even more out of control.
Obviously we can’t afford to disappoint all the people that were forced to jump into an outrageous housing market all at once, they need affordable insurance, and also still expect to 10x their property investment, particularly in coastal areas. If we don’t do this, it will be another huge blow to the shrinking middle class.
Meanwhile, the flyover states with fewer hurricanes and wildfires will subsidize coastal insurance basically due to strength of Californias market clout, and yet flyover states won’t ever see a windfall from their own rising property values. Since remote employees in flyover states often get less salary for the same work, they are already subsidizing rent for higher density areas. Regardless of where you live, everyone should recognize that this is unsustainable and divisive.
Are there going to be massive changes in building codes? Yes. Will that make owning a building more expensive? Yes. Will the pundits tell you it is the fault of the what ever political party is in power? of course they will.
What is true is that 'pre-global warming' designed infrastructure is going to become uninsurable because it will be regularly destroyed. Once a track record is established for 'global warming aware' infrastructure, the cost to insure it will become more clear.
If you were wondering "How will global climate change effect me personally?", this is it. Your city's costs are going up as it has to rebuild itself to a new standard, if you own a home your insurance costs are going up until you tear it down (or it gets destroyed) and rebuild it to the new standard.
Soundproofing material is also often made of cardboard (though we do have alternatives for that, unlike drywall).
the more volatile it is (and the less you've mitigated the risks), the more expensive your insurance gets
As with any market, there will be a price that the market cannot bear; and if your 'floor', your minimum policy price offering, is too high for your market, then insurance (as an asset class) no longer has product-market fit.
QED.
THIS. I have started thinking a lot about this recently, and this isn't a lot less obvious that it sounds at first. We tend to think that, if we find _some_ consensus to fix a problem, this will be fixed. But many problems emerge now that no consensus, no matter how global, will not fix.
And even that very idea that we are a reasonable species and we will converge to some consensus-based solution isn't actually true.
A friend owns a Land Rover with such a notoriously bad engine that insurers refuse to insure it. Land Rover had to make their own car insurance [1].
Another friend owns an electric car that is becoming increasingly uninsurable. I'm told that due to the battery, any significant collision defaults to a complete destruction of the vehicle and not a repair. The second-hand market for electric cars is also terrible, almost no car dealer will touch them in the UK.
Another friend had a car that was insured for £5k, but it was actually worth more. An accident occurred that completely destroyed the car in a fire, and they offered £1.5k. They approached the insurer and said if £1.5k is adequate to replace the vehicle, then they could simply drop a vehicle off instead. Eventually they increased the amount to £2.5k, half of their own estimate, and far less than the vehicles actual worth.
Another friend got into an accident and was permanently injured. They got an initial offer from the other insurance company, which their insurance said to decline as they believed they should expect more. Several years of slow progress, with the original insurer shutting down and passing their work to several other insurers, they were told too much time had elapsed and they should have gone for the original amount. They offered a £50 "good will gesture" and then closed the case. In the UK we have the Financial Ombudsman for insurance disputes [2], which after review decided that £50 was perfectly adequate.
Another friend had their vehicle temporarily ceased by the police (the police were wrong to do so in this case, but you have zero right to appeal). They lost one of the sets of keys for the vehicle and scratched the car. The police told the person there was nothing they could do, and to claim on the insurance. They instead paid for the damage themselves, because the insurance premiums on such a claim would not be worth it. Just tonight I saw something similar where somebody's mirror was damaged in a hit & run, choosing to fix it themselves to avoid insurance premiums increase.
I used to send out parcels and insure them, but several parcels arrived damaged (admitted by the couriers) and they said they needed proof of packaging the items correctly. From therein I would video the packaging of all items and something occurred again, but they made it impossible to actually use their insurance.
My point is this: Getting insurance is becoming increasingly difficult, but also getting the insurer to honour their agreement is becoming increasingly difficult. In the UK you are legally required to have car insurance, but they are clearly robbing people with no recourse to justice. The system is already broken and not fit for purpose.
[1] https://insurance.landrover.co.uk/
[2] https://www.financial-ombudsman.org.uk/consumers/complaints-...
Nothing will change, houses will be rebuilt the same way in the same place.
Interestingly, there seems to a number of cultural solutions to this problem. Like, imagine if the people of LA adopted a fondness for living in dense urban environments, and a reluctance to "live near nature," the problem of wildfires becomes much more tractable. Or for example, a culture of maintenance (forests, power infrastructure, infrastructure fireproofing, risk preparedness, etc.), like outlined in the book "The Innovation Delusion," could very well reduce risk a considerable amount. Unfortunately our civilization is too much stuck in its traditional ways to consider such solutions.
If it costs 10 million dollars to replace a house, the insurance will be out reach for most homeowners.
I think this is a subset of larger shift in the economics of insurance. While coverage focuses most on the climate change aspect, the majority of the change is driven by building costs. If you cant rebuild economically, then you cant insure economically.
It's not clear how extraordinary the losses are - by how much home insurance losses actually outpace home-price inflation (not CPI).
For the moment let's set aside legitimate concerns of climate change or land-use policy inducing unanticipated risk.
Insurance is systemic in the sense of pervasive, but the question is whether the crisis is a controllable excursion from stability, or itself amplifies the problem.
The key factor in the 2008 crisis was how foreclosures reduced prices causing more foreclosures and higher borrowing costs - a vicious cycle.
With insurance, homes are already affected. What other specific markets? Does insurance company diversification spread the impact from real estate costs to other industries?
The destabilizing mechanism is insurer exit after over-exposure. Over-exposure comes not from extra assets, but from mis-pricing.
US Insurance is a private market facility, so pricing is competitive. If a competitor prices insurance below your risk-assessed value, your incentive is to meet their price and try to make it up in other markets or through better investments. This tendency would get worse in times of strong investment growth.
Thus the investment-dependent insurance industry loses when investments fail, and also tends to lose after investments have been winning. Insurance profitability in the last two decades may reflect a sweet spot of stock market performance more than improvements in risk-assessment.
Assuming over-exposure, then what? Both low prices and availability depend on diverse and competitive suppliers. After an insurer has suffered major losses in a market, particularly to the point of viability, they lose the confidence of both investors and customers -- and insurance depends entirely on that belief of reliability. So their best response is to simply leave that market, to maintain their reputation in other markets. Then as more insurers leave a market, prices go up, consuming all available price elasticity - which is very, very significant for homes as fixed assets that are key to other value streams like jobs, schools, etc.
Still, that seems limited to housing unless it takes down cross-subsidizing insurance companies.
But it does end housing in these markets. Individuals won't be able to buy homes because of the cost of mortgages and insurance. But if insurance is unavailable large companies could own apartments (or even subdivisions where they lease homes) and self-insure or enjoy more tailored insurance.
With entire neighborhoods destroyed by fire, developers could rebuild newer, denser housing. And insurers could stay in business by settling with policy holders using money combined with a stake in the new neighborhood corporation.
That's the ideal solution, but it won't happen at neighborhood scale because it would involve too many coordination costs. The state (California) would have to effectively take all the property to avoid hold-outs, and then arrange with various insurance companies and developers.
So the economic solution is for developers to buy up plots of burned-down neighborhoods. A single small developer could use California's SB-9 to build 4 units where there was one. And larger developers could buy a 4 adjacent plots and build a 30-unit apartment. Both could self-insure, or be well-served by insurance company that focuses on protectable, high-density housing.
Doing that at middling scale - lots of complex transactions - would make a good business, albeit not the typical YC. You'd combine a small tech firm with a boutique law firm, add a government relations team. You'd have to be up and running quickly to use the crisis to get the policies you need and start coordinating developers who are sure to be in demand.
I also see you coupled it with the strawman fallacy, since I didn't claim anything as wide ranging as "people should aim lower."
Pretty impressive to pack so much poor reasoning into one sentence.
Spending within what one can afford is a long running method of resource allocation which has served mankind for millennia, and mankind is now living at a higher standard of living than any point in history.
I was originally responding to the above parent comment. Agree, if you can't afford it, don't buy it.
Developers here in the Midwaste aren't going to put a cheap house on a lot if they can instead put a 3500 sq. ft. home and get triple the profit.
- It's all part of planned land grabs and clearances - They don't want to pay to protect us
And so on. Nobody once mentioned the real driving factor of increasing incidences of natural disaster: climate change.
I wouldn't insure that attitude either.
Many dogs (pitbulls, akitas..) are uninsurable, yet we see them everywhere. People just accept damages, and pay it out of their own pocket (or run away and do not pay).
I think it is easy for people to "dump" on some of these higher priced real estate incidents seen recently but this is also affecting people on social security. What are we going to do just let their house burn down and then just have a bunch of homeless senior citizens in the mix. Why even have government? Seems like a terrible country to live in if a 30 year old needs to plan their house situation out into their 80s.
Also seems a bit ironic to me that you get insurance to cover unexpected future expenses but when insurance takes losses then they can just drop you because .. the losses were unexpected. They've known for 20++ years and I'm sure some... money was made... Did they put some away for this situation? Also if you personally experience a loss they also drop you almost immediately.
This idea that we'd just let insurance companies do whatever is *nuts*. Has that ever worked? Honestly pure capitalism seems like the real behind the scenes American dream or fantasy. This same climate change most likely was created by companies making buckets of money with no plan to deal with the side-effects we experience now. Just let the market take care of it....
These companies aren't about making "some profit" they want to make as much profit as possible. Is some 75 year widow living in her and her dead husband's house in Eureka, CA going to convince them to keep insuring her house at a reasonable price? Even if she paid the same insurance company for 30 years?
I think the solution is going to require some government intervention because insurance companies just don't care and it will be hard for new players to innovate quickly enough to tackle such a large crisis. Ie. legislating the inspections, legislating the fire-resistant building guidelines + insurance scale, subsidizing certain low income locations, working with communities to improve fire safety and resources. Some work has happened but clearly it is not happening fast enough.
This is the exact scenario every single scientist I studied under openly discussed: probably not an extinction level event, but very, very expensive… Expensive to the point of it being cheaper in the long run to switch to renewables asap and hope for the best.
It’s like a 150M conservatives are all at once are saying “Wait a minute! We should do something about this!”
Uh… yea, no shit.
Life on earth had dealt with 120 meters of sea level rise. So please.
If something is worth doing, it's worth doing whether you have insurance or not.
In my opinion, the amount of resources spent on buying insurance would, in almost every case, be better spent on prevention rather than after the fact mitigation.
You're forgetting about insurance fraud.
Case in point, my partner was diagnosed with a very, very, very rare terminal cancer at 32. Insurance turned out to be a great investment for us.
Taking a mortgage that allows you to buy a house you'll pay off over 30 years and then sell when you retire requires insurance.
Without insurance the investments we make in ours homes would need to be a lot smaller.
I'm not saying it's a bad idea, just that it's not without significant impact.
And i'd love it every lottery ticket, and horse i ever bet on was a winner
Feels like insurance companies just don't want to do their job.
They're getting paid to take someone's risk and then refusing to accept it.
Imagine I bet on a horse and then demanded the bookies pay out because it wasn't forecast to rain
There are many examples of this in the insurer of last resort, which are non-profit or government insurance when the private insurance can no longer cover.
Insurers of last resort have the same issues with denying claims and not paying out like the private insurers. If you read the OP article, the only people asking for not-for-profit or government insurance are basically asking for infinite money, which is both a non-starter and impossible.
What really should be done is private insurers raising premiums to match risk. This may mean some consumers will be priced out of insurance policies.
It will also further incentivize innovation in safety features.
Existing homeowners could easily get excluded from insurance, and/or be 'locked-in' on their home due to inability to sell it vs cost to make it salable.
There are examples even from the CA fires of properly designed and landscaped houses doing very very well amidst structures now practically uncrecognizable in original form. Most of the tech is there, but attempts to force it would have n-order effects leading to the political unpopularity.
At the end of the day if your house burns down you can go and get some wood / stone / whatever and build one somewhere else and this will basically always be possible to do to some degree.
The question is just about what the chance of having to do that per year is and what that represents in dollar value. It can’t not be possible.