How much federal aid is given to California wild fires vs. east coast hurricanes vs. New Orleans floods? How valuable are those regions to the financial health of the country?
This evaluation kind of fails though. Even if (for example) California is worth lots of aid because of its massive economic value, who's to say it will still be massively valuable economically after a decade of storms? That could decimate agriculture and other infrastructure, undermining its ability to host businesses.
It seems pretty hard to account for this in advance.
I'm not disputing the idea of actuary science here (I have relatives who work as actuaries), I'm disputing the idea of 'we should abandon this entire city because it's not worth the cost of saving the residents from hurricanes based on some economic projections', which seems to be a recurring theme here.
It's one matter to make insurance really expensive due to very obvious risk or make other pricing adjustments based on projections and quite another to axe a city.
Get rid of the government subsidized insurance and it will effectively axe the city as no new mortgages will be offered since no private companies are willing to offer insurance for it. No one is going to offer you insurance for a sure loss.
Non-term life insurance seems a good counterpoint. The price of the insurance may equal effectively a second mortgage over some timeframe but it can be priced.
In reality the risk of loss across the region is not nearly as high as implied.
Non term life insurance is a waste of money ignoring any tax advantages that don’t apply for most people since you can just directly invest the premiums in a low fee index fund and not pay the overhead costs of the life insurance company.
If the price of the insurance was so high that it was a second mortgage, then that would still devastate real estate prices and still cause economic decline in the region.
