Loading ...Just been reading a substack by someone complaining he can’t get hurricane insurance and likening it to fire insurance in Cal., and pointing out that insurance companies are not allowed to cancel policies in the affected postcodes for one year.
Thinking about the cancellations, what a – pointless? – lunatic? – empty, limelight grabbing? – stupid? – I really don’t know, idea. Nobody will be renewing their policies if the house has burnt down. And if they had miraculously managed to rebuild within 12 months, it would be a new policy. If you are a lucky one and it hasn’t burnt down, it’s not gonna burn in the next couple of years now anyway. All aside from the fact that government shouldn’t be interfering in these matters.
Which leads into his initial problem, where he claims he is “a homeowner who can no longer obtain hurricane insurance”. Later on he talks about “uninsurable risk”. He gives a visual of the last 11 years of states where home insurance was unprofitable. The worst year was 2023 where in 18 states, insurers lost money. Well, that means that in the worst year, they made money in 32 states! And California only made the unprofitable list twice in 2017 and 2018. Although there does seem to be a bit of a Blue bias overall, Texas made it three times and Florida five. But, but, this is how insurance works! You lose in some places and at some times, and win in the others! If it was always profitable everywhere all the time, policy holders are being scammed, premiums are too high and in a competitive market cheaper players would come in.
So what is an uninsurable risk (maybe tourist trips to the Titanic in a fibreglass sardine tin would be one)? My experience with insurances might be out of date, but it used to be the case that there was no risk that someone, somewhere, wouldn’t take on. Sure, if you’re the little pig living in the straw house in the Caribbean 99% of insurers might decline, but somewhere you’d find someone who would assess the risk and give you a proposed premium, which you probably would not like. But, you wouldn’t be uninsurable. Very expensive does not equal uninsurable.