The Homeowners’ Insurance Availability Act encourages building in Disaster-prone Areas

Whether it's building in areas prone to fires or floods or whatever the frick it is, it would slow down or stop if we as taxpayers were not offsetting the insurance companies' risk.

And yes, I know very well that no area is free from all risk, so please don't even try that particular strawman. It's ridiculous. Yes there are different risks no matter where you go, but not all areas are equally risky.

:hide: :)

Private insurers make $$$

Builders make $$$

etc. etc. etc.

*sigh*

federal flood insurance works, it should be expanded to all natural disasters.
hurricanes on the east coast, flooding, tornadoes, earthquakes, fires etc...

this would help rein in the homeowners insurance racket.

i have 2 houses here in miami, both have to have homeowners (which is basically fire), separate windstorm coverage and a flood policy.

what i think is a better solution would be to have a homeowners policy and a federal catastrophe policy.
everything would be covered by one or the other, no grey areas.
the federal fund would be non profit so it would be cheaper for everyone and it would protect the insurers from huge losses and they could eliminate reinsurance and the rates would drop.

Not everyone lives in an area that is prone to disasters. Someone living by a river is more likely to be flooded than someone who does not. Same with hurricane area landowners and those inland.

If there is a manditory insurance there is less consequences to living in a dangerous area. Those living in a dangerous area would be subsidized by those who choose not to live there. This would attract more people to the dangerous area, causing more building. Land values rise because the cost of mitigating disaster is subsidized. Next disaster, more people are effected.

When behavior is rewarded you get more of that behavior.

You are asking the rest of the nation to give you money (lower insurance rates, increased land value). If you own 2 houses, you don't need it.

This is why moral hazard is such a problem. If we insured the whole country at the same rate then those in dangerous areas get an unfair subsidy.

Pay a danger premium, then those living there bear the costs and can make a knowing and intelligent decision on whether or not to live there.

our institutions are all upsy downsy. (Greed and panic?)

It doesn't get a lot of media attention (shock!)... but it was originally enacted in 97.

:kick:

there should be a requirement for rebuilding to the highest possible standards to prevent a recurrence.

If you want to rebuild in fire areas, metal roofing, metal window shutters, fireproof exterior (stucco, cinderblock, etc) ONLY. If your insurance payment doesn't cover it, build a smaller house or build elsewhere, I don't care. And ban the planting of eucalyptus and palm trees in these areas.

If you want to rebuild in an area that floods, it better be on stilts (you can put the garage underneath the house). If you want to rebuild where there are hurricanes, there are ways to mitigate the potential damage there, too.

If these disaster-resistant new homes aren't as aesthetically pleasing, TOO BAD.

but the fact that they get subsidies makes it less imperative for them to be so strict.

Why do people build where there are earthquakes?
Why do people build where there are hurricanes?
Why do people build where there are tornadoes?
Why do people build where there are fires?
Why do people build where there are floods?
Why do people build where there are avalanches?

You gotta live somewhere, and once you own a home, you need to insure it.
The risks of most of these disasters have gone up due to global warming.

If you can't get insurance, the lender may foreclose on your mortgage.
You won't be able to sell, either.

Insurance companies make their money assessing risks... they know where it doesn't make sense to build. We shouldn't be covering the losses so that unrestrained growth goes on in areas where it doesn't make sense to build.

Most of the heavily-populated areas in the US are at risk for one sort of disaster or another.

As the cost increases, the situation will change. Hopefully for the better.

This isn't much different.


Don't subsidize health insurance and people will be forced to be healthy.

Don't subsidize homeowners insurance and people will be forced to live in disaster-free areas.


See how easy life is when you get government out and let the free market rule?

Buildings and people are indeed two very different things.

I cannot believe anyone would think they are analogous in this context, honestly.

No shit.

Now that you have pedantically avoided the point, perhaps you can explain why you think it is not a legitimate function of government to help people have places to live?

I'm not against people living in those places, but I think it's unfair to force others to assume the risk because you choose to do so.

There are lots of places to live. No one is forced to live in high-risk areas.

Where do you draw the line?

That's the sticky point, which there is one in every situation like this.

I don't think I'd *personally* draw the line at smoking. That's not risky enough. I don't know... maybe skydiving? The thing is, people are going to have differing opinions on that kind of thing... so that's why risk assessment really has to be used as an arbiter, instead of opinion.

You know, I've seen the idea crop up in threads about women having litters of kids due to fertility treatments. Up to now I don't think there was any standard about how many fetuses to allow to grow in a woman's uterus. But now I see that's changing... there are standards being put in place. So... it's unrealistic to expect anyone to abide by an 'all or nothing' type approach. I think it's very realistic to work out a balance that will satisfy at least most people.

Does that seem reasonable to you?

by avoiding unhealthy behavior than property owners do in not building in risky areas; because there is an independent incentive to preserve one's health (i.e. life itself!) the moral hazard problem does not exist to the same degree.

There was a story on NPR this morning about building fire resistant housing in CA. And this week was the first big test of their theories. And they worked for the most part.

http://www.npr.org/templates/story/story.php?storyId=15655337

If that's so, I think all housing should be built this way, not just in fire zones. House fires are still way too common.

As for the insurance aspect, I think there is probably a fine line. Many people build fancy vacation homes on the Outerbanks, only to have them blown down in a Hurricane. Orrin Pilkey, a local environmentalist, has raged for years about people doing this. He says we should be building in such precarious places out there.

I don't know that you can remove people who really do need to build homes, but I think you can definitely discourage the vacation homes in disaster areas theme though.

the insurance companies will cover the high-risk areas with more affordable rates, and we're all set.

Hell, their houses and farms just keep getting blown away. When are we gonna get some sense and evacuate Kansas, Texas, Oklahoma, Nebraska, Missouri, Illinois, Indiana, Kentucky, and Ohio??

At a minimum, let's PROHIBIT building in the orange zones ...

It will become cost-prohibitive if we stop subsidizing the insurance.

If "we" stop subsidizing it--whatever "it" may be--then the market will automatically conform to your will.

And it's not an idea that is completely bankrupt of value.

Why are people so combative in here?

I'm beginning to see why so many have given up on this forum.

In hurricane country?

Tornado Alley?

The snowbelt?

Shared risk is a honorable tradition among human societies. But that's a digression. Who would you prohibit from rebuilding?

Or this just a backhanded bash at those who live on the coasts or in affluent areas? But that, too, is a digression. Who would you prohibit from rebuilding?

Really... where is that coming from?

Sorry you don't see it.

It would simply make it more expensive to build in high-risk areas. Not impossible, not prohibited, or any other variation on that theme.

:shrug:

Shared support is the mark of a civil society.

Rich folks ghettos? What does that even mean?


Shared support is one thing... but nothing is absolute, and there is a point at which some things become unsustainable.

.... afford to live in certain areas. When an area becomes monolithic in some measurable social, ethnic, or economic way, it is a ghetto.

That's what I meant.

but it doesn't seem to work for me, since nobody is required to live there, it's not the result of bias or stereotyping, and it's not due to hardship or social restrictions.

Right now, anyone can *choose* to live there. True enough, there are certain economic barriers, but they're almost entirely market driven and very much small-'d' democratic. When we start overlaying laws that, de facto, are exclusionary (whether that was the intent or not) then we encourage economic stratification. Economic stratification is exclusionary and the result is ....... rich person's ghettos.

but I tend to think that that is already the case for many other reasons.

And you know, I doubt this would even be an issue if it weren't for climate change. I don't know exactly how much money is spent on the subsidies, so maybe now it's still negligible. But it seems to me that with the way things are going, this is going to be an even more combustible issue in the future. Maybe the near future.

I know many will disagree with me, and that's understandable. I'm just giving my opinion on the situation as I see it.

It started with insurance 'subsidies'

Now you're introducing climate change and class/economic issues with respect to housing. Issues worth discussing, but OT from the original discussion.

and therefore not so unreasonable, before we started with this period of increasing risks.

But I see a very real possibility that this kind of thing could very well become much more of a problem as time passes...

:shrug:

.... but more germane to the issue, fires in SoCal have been happening for ....... oh ...... the last few million years or so.

.... insurance.

that it is far more expensive to build in San Diego or Malibu then where have you been? The reason we have the earthquakes and fires is the same thing that makes CA attractive. The canyons, mountains and valleys which all go right down to the Pacific Ocean which happens to be on the N. American Plate - AKA The Ring of Fire.

Would you like it if all of us in CA moved to, say.... New Mexico? Where they hate us.... really. they do. Arizona? We could all move to Alaska. Or maybe Oklahoma. Or Kansas.
Would i pay more for tornado insurance (if there is such a thing) in the mid west?

I hear there is room for the millions of us in North and South Dakota - that is if we all live where we can hold hands --- The argument is not very valid if you do not include answers to the problem. You feel that you personally are paying more insurance because I live in San Diego.

I know for a fact that we pay vastly higher rates for our home owner insurance and fire insurance than people in OK or other states in the midwest. I also know I do not have to insure my home against Hurricanes or ice and snow damage.

I think your argument is not fully cooked - I read the OP over and over and do not want to come across as mean spirited but what the fuck do you want me to do? I can not possibly pay any more than I already do for the fire insurance I have.

California is not the only place in the country with high-risk areas.

or do you just reserve your anger for certain people.

It was a more recent development, I think, which led to institutions being allowed to craft those idiotic loan schemes. I would target my "anger" at those more recent developments.


Also, any "anger" in my posts in this thread is not directed at PEOPLE, but rather at the situation.

A 10 month old change in the insurance industry is going to have a minute effect on the building habits of individuals, especially in a declining real estate market with reduced building in general.

I was under the impression that this subsidizing of private insurance companies was going on for some time... perhaps the person I heard speaking about it was referring to some other bill.