What is the difference between flood insurance that is unaffordable vs. a house that is uninsurable?
A home where there is a 1 percent chance of flooding each year.
It is continuing to increase as global emissions increase.
There is conflict about whether the withdrawal of insurance is: a) a market clearing action signalling where people can live and be insured, or b) the withdrawal creates negative externalities which should be mitigated by socialising the risk from insurers to governments (and ultimately taxpayers or lower risk residents).
Overlapping private insurance with government pools, risk reduction activity mandates and ongoing legal challenges in the aftermath of disasters; whatever we deal with today will be considered ‘simple’ in 5-10 years time.
Kousky’s book says that it is a moment of deep change insurance, but the only stated innovations are VC backed ‘smart insurance’ that mainly delivers on reduced costs through automation.
Exactly right. In my neck of the woods the gov is rolling back buy-backs in the 1-4 year flood areas, stating floods of the 2022 magnitude are not anticipated to happen again. So no buy back, uninsurable and repair at your own risk, yet the rental price remains high on unsellable houses.
The real tell is some of the state gov institutions aren’t moving back into the flood prone areas and are looking for permanent higher grounds to move their temporary offices.
