Climate and Insurance

[Phoebe]

Something I find myself very much wanting to do but not having time to do is to research the patterns of insurance offered in places like Miami or coastal Maryland or other places where the Earth is sinking under the sea inexorably. Which insurance companies are still covering major properties here? These are the ones to short, while the companies that are pulling out of such areas might be the stocks to buy. I don't really like buying stocks and insurance companies on principle, so maybe it's just a matter of shorting the other companies.

[Mike]

In many places, the federal government ensures a lot of stuff that has allowed for very risky ventures to be taken and insured with little risk to the private sector. It is problematic.

[Kyle]

In many places, the federal government ensures a lot of stuff that has allowed for very risky ventures to be taken and insured with little risk to the private sector. It is problematic.

Yeah. This.

But the problem runs beyond coastal areas. People have speculated that inland places like central Texas are going to be subject to prolonged droughts with regular “100 year” floods (like the one that destroyed my house) every five to ten years. The prolonged droughts in the west are going to lead to devastating wildfires that will cost insurance companies hundreds of millions of dollars. So I don’t think this is an issue limited to the coasts.

[bralbovsky]

The whole rental culture of places like the Outer Banks depends on this racket. Wait for your house to blow away, expand it so that you can rent it seasonally, rinse, repeat.