US Homeowners Start To Lose Their Insurance
“The US insurance system is showing signs of breaking down, as expensive risks become more common.” The New York Times
In some areas in the US, people cannot get home insurance no matter how much they are willing to pay. Private insurance companies have given up in some parts of the LA areas and some areas of Florida. These financial firms lost money on the last large storms or fires,and won’t or can’t lose money on the next one.
*A History Of Fires And Storms
*Fire Ruins $40 Billion Of Property In LA
It has been pointed out in the press recently, several times, that low insurance rates discourage risks for people who do not want to see their payments rise. High ones show people that their financial institution understands that their living circumstances have become borderline foolish.
These pockets of insurable homes and uninsurable empty lots where there were once houses means a drop in demand and therefore price. The economic question is when does the price get low enough to take a risk? The only way parts of the LA region most badly damaged by wildfires gets rebuilt is through a collapse of the value of what were once multimillion homes.
Cities Without Tax Bases
The insurance problem is even broader. Cities in what have become disaster areas may not have the money to rebuild infrastructure and fundamental services. Without these things, some cities will not be habitable. The problem gets even deeper. Without homeowners, there is no tax base.
A spiral that invariably goes downward.
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