I think you misunderstood my intent. People should live wherever they want, but should bear the risk-associated cost of that choice. Which is not what happens today - State Farm is exiting the market because CA artificially limited premiums, and Florida keeps bailing out homeowners and insurance companies when hurricanes wreck the coast.
No, I understood your intent, but I don't really agree that it makes sense to individualize risk like this so that one person gets completely ruined by freak occurrences. Maybe if we're talking about particularly high-risk zones, but the entire state of California, inhabited by 44mn people and spanning more than half the West Coast, should be left out to dry?
> I don't really agree that it makes sense to individualize risk like this so that one person gets completely ruined by freak occurrences.
An earthquake in California is not a freak occurrence. A fire in a fire prone area is not a freak occurrence. A hurricane in Florida is not a freak occurrence. A sink hole in Florida is not a freak occurrence. People not living in those areas should not be forced to subsidize those that do. It's not like people are being dropped in large numbers yet or that State Farm was the only insurer.
> Maybe if we're talking about particularly high-risk zones, but the entire state of California, inhabited by 44mn people and spanning more than half the West Coast, should be left out to dry?
Maybe California makes it too hard to refuse service to only certain people and this is the only way to handle it? Do you honestly believe they would leave money on the table if they didn't have to? There are other insurers there.
Yeah I suspect this story is being oversold like every second California catastrophe story (remember when we were going to have no bacon?). But as far as the “oughts” of it that’s where I stand.
> State Farm is exiting the market because CA artificially limited premiums
I don't know if this is California's intention, but I think limiting premiums is more effective at discouraging homes existing in hazardous areas than high insurance where the rich would simply lay the insurance. When fires burn through inhabited areas, state agencies have to attend to them to save lives, independent of insurance premiums. This costs the state money.
