Natural disasters which are so far outside the realm of prediction as to become 'black swan' events are, of course, horrible, and everyone benefits from pooling resources to combat these situations (although this is rarely in the form of insurance, and more in savings).
But I view insurance premium pricing (as with all other pricing) as a signal, more than as a result of reckless profiteering. If you're looking to move into a house and the insurance on it is too expensive for you, it means you can't afford that house. Flood/earthquake/volcano risk is equally as important a financial aspect of the property as its purchase price, and just like we saw with the subprime loan crisis, giving credit to those who can't afford it is generally a bad idea. Even if you're prepared to bail out all the institutions which hold that credit, you still get crises.
Now of course, the insurance premium scales with the price of the property, so in an area which often floods, the TCO of houses with a purchase price of X will be inflated to X * (1 + Y) (with the flood risk premium Y calculated by the underwriters based on historical data and predictive models). This means your purchasing power in a flood plain should have a multiple of 1/(1 + Y) compared to outside the flood plain. Basic laws of supply and demand mean that fewer people would be able to, or choose to live in such an area, and therefore the catastrophe of a flood (including the burden on the underwriters) would be lessened accordingly.
There once was a time where people would indeed travel great distances to improve their living situation, and I've done this myself on a few occasions, taking apartments that were much further from the area I wanted to be because the rents on the more central places were too expensive for me. The idea that people have a human right to be able to afford whatever they want, subsidized by everyone else, is a very recent idea indeed, and it's one which I feel isn't standing up to the test of time.
In terms of healthcare, a great analogy to 'flood plains' would be people who continuously put their life and limb at risk by engaging in acts which are well-known to be harmful: smoking, excessive unhealthy eating, and substance abuse. My point is illustrated by the prolonged debate in countries with socialized healthcare on how to treat smokers, the obese, and drug addicts. It's by no means a solved problem, but my point is that you can't refer to the example of publicly-subsidized insurance of individuals who take above-average risks as an example of why we need more of that exact same thing.
Natural disasters which are so far outside the realm of prediction as to become 'black swan' events are, of course, horrible, and everyone benefits from pooling resources to combat these situations (although this is rarely in the form of insurance, and more in savings).
But I view insurance premium pricing (as with all other pricing) as a signal, more than as a result of reckless profiteering. If you're looking to move into a house and the insurance on it is too expensive for you, it means you can't afford that house. Flood/earthquake/volcano risk is equally as important a financial aspect of the property as its purchase price, and just like we saw with the subprime loan crisis, giving credit to those who can't afford it is generally a bad idea. Even if you're prepared to bail out all the institutions which hold that credit, you still get crises.
Now of course, the insurance premium scales with the price of the property, so in an area which often floods, the TCO of houses with a purchase price of X will be inflated to X * (1 + Y) (with the flood risk premium Y calculated by the underwriters based on historical data and predictive models). This means your purchasing power in a flood plain should have a multiple of 1/(1 + Y) compared to outside the flood plain. Basic laws of supply and demand mean that fewer people would be able to, or choose to live in such an area, and therefore the catastrophe of a flood (including the burden on the underwriters) would be lessened accordingly.
There once was a time where people would indeed travel great distances to improve their living situation, and I've done this myself on a few occasions, taking apartments that were much further from the area I wanted to be because the rents on the more central places were too expensive for me. The idea that people have a human right to be able to afford whatever they want, subsidized by everyone else, is a very recent idea indeed, and it's one which I feel isn't standing up to the test of time.
In terms of healthcare, a great analogy to 'flood plains' would be people who continuously put their life and limb at risk by engaging in acts which are well-known to be harmful: smoking, excessive unhealthy eating, and substance abuse. My point is illustrated by the prolonged debate in countries with socialized healthcare on how to treat smokers, the obese, and drug addicts. It's by no means a solved problem, but my point is that you can't refer to the example of publicly-subsidized insurance of individuals who take above-average risks as an example of why we need more of that exact same thing.