Homeowners insurance is pricing people out in disaster-prone cities

Everyone's home insurance premiums should be lower than they actually are. Except they're not, because we have to pay to offset the cost of all the people rebuilding their houses on the Florida coast every few years.

That's one way of putting it. The other way of putting it is that the affected are bearing the cost of climate change imposed on them by the rest of society, who are benefiting.

A confounding factor is that construction and materials have gotten much more expensive. You aren't insured for what your house cost to build 20 years ago, you are insured for what it would cost to rebuild it after a disaster.|

The price of construction lumber quadrupled during COVID (it has since receded some), so all of a sudden the cost to frame a house went up by a significant margin, which means that the cost to insure against the future possibility of framing a house goes up too.

You can pull the annual reports for any publicly traded insurance company if you are curious about the numbers.

Either way the insurance is driven by data on the ground, and I think they're fairly trustworthy about keeping their own costs down. If they say it's uninsurable it probably is a risk.

No one's saying hurricanes only exist because of someone's politics. The insurance beancounters are very much saying the winds are faster, more frequent, and do more damage than they used to.

And there's nothing silly about the billions of beans they're counting.

The problem with this method is that it tends to gentrify the region. Wealthier people can afford to live elsewhere during the repairs, but people living paycheck to paycheck are often forced to take the money and sell the land.

"Rezoning" is a needless control that then prevents future development that might be impervious to whatever disasters caused the periodic rebuilding before.

I hope you can get out of there before the house is unsellable, or at least get the material cost back.

Any assistance on moving out is a very bad idea. There are rising insurance costs, slowly, people have time to respond.

People in Florida did not even advocate for mitigations that would have prevented the rising costs, when they were given decades of warning.

Protecting home values above all else is very bad for society. Unless renters are given the same protection and massive handouts, it's a very unfair system

Yes, you support the people left behind with the profits of the people who are ahead.

The US voters just hate that type of equality. And as a result the vindication is merited - that is an inherent feature of non-merit based inequal societies, just the the US is.

I don’t feel sorry for these people. They made choice and the evidence this was inevitable was in front of them for 10 years at least. They don’t deserve special consideration.

Considering how we treat things like job loss, which is a good allegory here as it has all the same features of circumstance, why do they deserve special considerations that aren’t extended to other groups?

Its not as simple as "N people died from literally being inside the storm, therefore the number of potentially saved lives is N". There is always a domino effect from a massive disaster, even if "just" a couple of people die directly at the hand of the disaster.

Using public funding to keep on bailing people out is going to get expensive for everyone and won't be that popular the more often it happens. Expensive bailouts make them a natural cutting target.

The way this works out financially is that insurance prices go first. Then banks do the obvious thing which is to be reluctant to provide mortgages on property likely to suffer damage within the mortgage period. That probably is already a thing. That in turn makes existing property a harder sell and affects property prices negatively. And as a result, some property mortgages might be under water before the property is under water. A natural disaster would wipe out the uninsured property and then the mortgage. Any banks with lots of exposure to that might be facing issues if that happens.

Any public funding used mitigate that is more likely to go to these banks than the people affected. Which won't be popular.

Easy to spell this out, because minus the root cause (natural disasters), this is more or less what happened around 2009 when banks had to be bailed out because of the subprime loans. Loads of foreclosures and misery. But it was the banks that got the bailout.

The predictable end result is that after a few disasters, certain areas just won't be rebuilt again because nobody is willing to fund that. Some people might move out before the worst happens. Banks and insurers will be the first to move out. Probably sooner rather than later. That probably won't be great for people that remain since investments in public infrastructure and maintenance of things like roads will also drop off for the same reason.

When I saw the headline "disaster-prone cities," I thought maybe they were talking about crime or terrorism or something. For something like a hurricane, everyone in the danger area would see insurance rates go up, not just those in the cities. Odd way to word it.

And those disasters are geographically off. Hurricanes are not a coastal thing for the whole nation, west coast does not get them. Tornadoes are not a desert thing. All those sound like being pulled out of a hat without actual knowledge.

the post war economy was an aberration when the rest of the world was recovering from being bombed to hell, it was never going to last forever. excesses like cheap rebuilding are just not as good of an idea of building to last in safe areas.

It's a totally different story now that the average beachside "home" is a $10 million dollar mansion.

Skipping past all of the other negatives about living in a known disaster prone area, we couldn’t afford to rebuild even back then without endless deficit spending. As I speak, New Orleans is still in the process of rebuilding post-Katrina decades later.

> This is less a signal of "insurance getting smarter" and more of a signal that American excess is coming to an end.

They’re not mutually exclusive.

If you live in hurricane/tornado land, probably you'd better use bricks/concrete blocks in a sturdy steel or reinforced concrete frame with a deep foundation.

We will all pay the tab to restructure society to avoid this climate change effect, or we won't and we can expect the people who get screwed to not be particularly invested in being part of this society.

Where will people move, without a huge amount of homes being built, where will they move to ?

If the move, even with their current insurance rate, their payments/rent will probably cost much more then they are paying now. Especially if their home is paid off.

Inland from the coast of Florida is a swamp. Is that really any better? I know the orange man is a fan of draining swamps, but I'm pretty sure that's not what was meant. People don't live in deserts. People just need to accept that the opposite of no water can be just as in hospitable

"Climate migrations" has been an alarm bell for a long time. It's just people didn't want to listen.

The issue with your statement is if it's a person or human-created entity that's doing the stripping, that's a problem we can address. When it's the environment we live on doing the stripping, well, that's simply a predicament.

If you want to get mad at someone, get mad at the groups that have been propagandizing for the last few decades that carbon is a myth and we're completely decoupled from the ecosystem we live on.

US taxpayers have funneled untold billions of dollars into these states to prop up their real estate industry by providing FEMA flood insurance at hugely subsidized rates, while the private insurance that's becoming unaffordable only covers wind damage. When you see those photos of towns wiped away by a hurricane, that's flood damage, and your tax dollars are paying to rebuild those houses in the same place. Over and over.

In a just world there would be legal liability for some of the real estate industry folks who persuaded people to put all of their net worth into an asset that's going to be blown away in the next hurricane, and other consequences for the politicians who enabled and encouraged them. The odds of this happening in real life seem to be about zero.

If you don't want that speficikt risk, then rent and invest the difference in broad etfs - it will typically put you equivalently.

I'd be interested in relocation programs or something but I can't see how the value of the houses can be preserved.

This is one reason why legislation is a smarter, better form of regulation. But capitalists rely on promoting the evil in people, and do not care about anyone but themselves. So it is preferable to them.

A summer camp in Texas was flooded this year and had fought against their land being moved into a flood risk zone on the map. They were able to beat it in court but not in reality, and children died.