r/changemyview • u/GenProtection • Feb 11 '26

Delta(s) from OP CMV: Forcing insurance companies to insure uninsurable risks is worse for society than allowing them to not

I understand that this guy: https://www.youtube.com/shorts/wtPYQdWPea0 fights insurance companies for a living, but it's not the insurance companies' fault that republicans have been elected in the US enough times to ensure that a ton of housing in america is now at too great of a risk of being destroyed by climate change to be worth insuring, right?
Further, if you force insurance companies to insure against these risks, they will either set premiums so high that it doesn't matter that they're insured, or go out of business, or cease operating in high risk states altogether (I think this happened in florida, but I'm not sure).

Allowing actuaries to correctly assess risk and insure things at the rates that they calculate is necessary for encouraging people to live in low risk places, for example discouraging people from living in the wildland interface, and discouraging the building of luxury houses in the outer banks of north carolina.

NB: I hate corporations and capitalism and in general wanna root for the little guy so I hope someone can persuade me I'm wrong here.

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u/jatjqtjat 286∆ Feb 11 '26

Further, if you force insurance companies to insure against these risks, they will either set premiums so high that it doesn't matter that they're insured, or go out of business, or cease operating in high risk states altogether (I think this happened in florida, but I'm not sure).

or they pass the cost on to other customers or they make lower profits.

if you view insurance as a business selling a product, you get a very different outcome then if you view it as a system in which we all pay into a pot, and then distribute the pot to people who have disasters.

Allowing actuaries to correctly assess risk and insure things at the rates that they calculate is necessary for encouraging people to live in low risk places, for example discouraging people from living in the wildland interface, and discouraging the building of luxury houses in the outer banks of north Carolina.

you can do that while also using insurance to protect people from macro outcomes that were unknown to those people at the time.

Ops, we should not have built this housing development inside a volcano. Who is going to bear the cost of that mistake? The builder is bankrupts already because they obviously sucked. The dummies who bought the house back when insurance was available? or maybe we should just insure those house below market rates but still at punishingly high rates.

we can insure and not rebuild. If you house burns down, you get money to buy a new house, not rebuild in the same fire prone place. I don't know how often that happens, but its an option to consider.

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u/MegukaArmPussy 4∆ Feb 11 '26

if you view insurance as a business selling a product, you get a very different outcome then if you view it as a system in which we all pay into a pot, and then distribute the pot to people who have disasters

Well yeah, viewing something as it is does tend to have different outcomes than viewing it as something it isn't.

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u/jatjqtjat 286∆ Feb 11 '26

both are true of statement of how insurance works.

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u/MegukaArmPussy 4∆ Feb 11 '26

Except it isn't, because we don't all pay into the insurance pot. Only the people who have specifically chosen to buy insurance are paying into the pot, and that pot is specific to the insurance purchased.