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Comment by consumer451 | Hacker News Reader

> FL's in a bad spot where home insurance in particular is unsustainable given the increasing threat from climate change.

I was a South FL resident for half of my life. Either the insurance pool is spread across the entire country, subsidizing FL, or just stop.

FL will soon be uninsurable in the free market.

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Only parts are uninsurable. If a house was built after 2005, it was done with updated hurricane codes. Most are built up higher, have hip roofs, and have their roofs strapped down to cinderblock walls with cement filled in the corners. All new roofs have a "sealed deck". The uninsurable are going to be on the coast (although you can mitigate this in a lot of cases) and low areas.

Side note: all insurance claims are subsidization.

> Only parts are uninsurable.

But the X zones keep shrinking, don't they?

I worry that FEMA's FIRMs will stop reflecting reality in the current political environment. Then many homes will be below flood levels. Then what happens?

Isn't this what happened in areas of California?

If I understand the situation correctly, yes.

The core of insurance is Lloyd's of London. They do the math, aka the re-insurance numbers.

If a retail insurance company can't get re-insurance for a local market, then they exit that local market.

That is what happened prior to the LA fires. The math saw it coming, re-insurance was pulled.

Both CA and FL are high-risk, and each have state-backed insurance systems of last resort. The more that these get tapped, the more unsustainable it all becomes.

Climate change, anthropogenic "or otherwise," sucks for insurance.

You're missing one key piece of the puzzle: consumer insurance rates in California are regulated by the California Department of Insurance led by an elected Insurance Commissioner. It's the agency responsible for regulating rates and how fast insurers can raise them. In the last decade, it's been very slow to allow insurers to raise those rates to account for the risk they've recalculated.

Insurers didn't pull out because the state is uninsurable, but because they were being hamstrung. Properly priced in fire insurance can be expensive here depending on location but it's not like Florida where there's predictable water damage to most houses in the path of a hurricane every 5-10 years. These past fires were the most destructive in history and burned under twenty thousand structures in the fifth largest economy in the world - it was traumatic but relatively minor in the grand scheme of things and well within the state's capacity to bail out without federal assistance (unlike Florida and the National Flood Insurance program which has sucked up tens of billions of federal funds since Katrina).

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