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61 sats \ 6 replies \ @Undisciplined 13 Jan \ on: California Wild Fires: Perspective of a Native Californian econ
Great post!
Right after separation of money and state, we need separation of insurance and state. Our whole society is badly distorted because the costs of risky behavior are not being borne by those engaging in it.
I have been trying to focus on positive stuff more in the new year so I've missed a lot of things I'm sure.
I just heard that some clown with the state is saying he is canceling all non-renewals. Its absurd. The crisis is not the rising cost of insurance but rather the rising risk to humans which causes the insurance rate increase. Its the RISK. Not the signal that is the problem.
We have a crisis of competence caused by negative incentives.
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I get pretty angry when people cite rising insurance costs and insurers leaving the state as part of the problem.
Insurance costs and insurers leaving is 100% a symptom, 0% a cause of the problems. In fact, the state would do better to work with insurers and ask them: "What mitigation strategies can we do to bring you back, or to bring down the costs?"
Instead, the politicians blame greed and the voters vote for them. Because the voters are stupid.
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It was pretty eye opening when I had an insurance client for a few years. I learned a lot about how insurance works even though my work was all on the software side of thing and never touched the actuary side.
Its interesting as I started to read Rothbard and other anarcho-capitalists like Bob Murphy I learned that many of the regulatory functions could be provided by insurance in the absence of state monopoly. Its clear to me that regulation has value. Management of risk as well. The main issue with the status quo is that the state has a monopoly on these things and also has poor incentives.
I started to become fascinated by insurance and began asking questions of my client. Insurance is pretty fascinating on a technical level. Most people do not have a fond view of insurance and honestly I do not either but this disdain should be directed at the state. At least insurance companies are not monopolies and also do not have guns pointed at you if you don't do what they say.
That's another topic.
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Yeah its Marxist programming in effect. People are ignorant of how insurance works and how the market works. This is intentionally done by government education.
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we all have a right to cheap insurance that covers everything with zero deductible
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Bill Ackman posted on X: if insurance carriers refuse to insure your home, it's time to sell your home and move
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