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Comment by JumpCrisscross | Hacker News Reader

> Florida state taking on immense financial risks

Andrew’s insured losses in Florida were $15bn ($34bn in 2024 dollars); today “3.7 million residences would be in the path of an Andrew-like storm…with a total replacement value of more than $900 billion” and “insured losses [over] $72 billion” [1].

Florida’s budget, for context, is about $120bn [2].

[1] https://www.insurancejournal.com/news/southeast/2022/08/24/6...

[2] https://www.flgov.com/wp-content/uploads/2024/06/Budget.pdf

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This is great data to share to rapidly frame the situation and the risk, and the worrisome part is that Florida can continue on its course relying on federal government funding whenever there is a disaster through disaster declarations. Some sort of back pressure mechanism is needed to dissuade folks from moving to high climate risk areas, but that is in direct conflict with states with high climate risk incentivizing and desiring economic activity through mass migration to them.

I suppose the bright side of this is that the general fund is funded by federal tax due of the top 40% of US taxpayers, so there is a very coarse progressive taxation mechanism to this climate cost liability. Still not great!

> Some sort of back pressure mechanism is needed to dissuade folks from moving to high climate risk areas

Isn’t that in the gap between $900 and 77bn?

How does that stop a business or individual from moving to Florida? It will not be until a loss at scale occurs that sadness will be realized.

> How does that stop a business or individual from moving to Florida?

It doesn’t. It means when their town gets swept out to sea, they’ll be on the hook for 90% of the cost of rebuilding. That will presumably reduce their numbers.

I fear by then it will be too late, and these rugged individualists will be putting their hand out for socialism help after their poor choice. I would like to hope there is enough political will to tell them to pound sand and grab their bootstraps, but, you know. It is the third most populous state in the US with ~22.9M inhabitants (as of this comment), so its possible we get dragged by these folks. Hard to predict the future in this regard due to politics involved.

Thank you. I see your point. It's only one year of fiscal budget. That's not immense, but only impactful. I was putting some (actuarial) things I know little of together in my mind. US state pensions being unfunded, large risks being handed over to state insurers. Quite different than EU, in actually the opposite way than I'd imagine.

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