Insurers Are Deserting Homeowners as Climate Shocks Worsen(nytimes.com)
nytimes.com
Insurers Are Deserting Homeowners as Climate Shocks Worsen
https://www.nytimes.com/interactive/2024/12/18/climate/insurance-non-renewal-climate-crisis.html
19 comments
How do you feel about the denialist argument that since people still buy expensive waterfront property, climate change is not a big deal?
My interpretations would probably be some combination of
- information asymmetry leading to demand distorting upward
- the people who are buying the property have priced in the loss relative to their utility and will be relatively unaffected should they be left holding the watery bag
My interpretations would probably be some combination of
- information asymmetry leading to demand distorting upward
- the people who are buying the property have priced in the loss relative to their utility and will be relatively unaffected should they be left holding the watery bag
Why so uncharitable? You could at least consider the possibility that their understanding of the situation is better than yours.
There are supposedly two climate-related threats from living on the coast: sea level rise and storm risk. Sea level rise is so trivial that many Pacific islands have been getting bigger, not smaller as was predicted, and it's a very steady rate of change. That leaves storm risk. NOAA is a group of people with a long history of scientific scandals who owe much of their funding to their claims about climate risk, but let's see what they say about living on the coast:
https://www.gfdl.noaa.gov/global-warming-and-hurricanes/
> "it is premature to conclude with high confidence that human-caused increases in greenhouse gases have caused a change in past Atlantic basin hurricane activity that is outside the range of natural variability"
Mankind has been emitting CO2 for 150+ years but there's no data showing it's made the weather worse.
So, all claims that living on the coast is a bad idea are based 100% on modelling predictions. Given they've been diverging over time and divergence has got worse instead of better, the opposite of what should be happening, reasonable people can certainly conclude it's OK to ignore them when considering property prices.
There are supposedly two climate-related threats from living on the coast: sea level rise and storm risk. Sea level rise is so trivial that many Pacific islands have been getting bigger, not smaller as was predicted, and it's a very steady rate of change. That leaves storm risk. NOAA is a group of people with a long history of scientific scandals who owe much of their funding to their claims about climate risk, but let's see what they say about living on the coast:
https://www.gfdl.noaa.gov/global-warming-and-hurricanes/
> "it is premature to conclude with high confidence that human-caused increases in greenhouse gases have caused a change in past Atlantic basin hurricane activity that is outside the range of natural variability"
Mankind has been emitting CO2 for 150+ years but there's no data showing it's made the weather worse.
So, all claims that living on the coast is a bad idea are based 100% on modelling predictions. Given they've been diverging over time and divergence has got worse instead of better, the opposite of what should be happening, reasonable people can certainly conclude it's OK to ignore them when considering property prices.
Eh, people (including me) are very good at optimizing for short-run happiness and less-good at optimizing for longer-run happiness.
A million people a year get arrested in the US for drunk driving...and that's apparently the equilibrium. If that many people are willing to risk their lives and their freedom to save money on an Uber, it's not hard to believe that millions of people would be happy to buy beautiful waterfront property.
The risks are known but not totally apparent.
A million people a year get arrested in the US for drunk driving...and that's apparently the equilibrium. If that many people are willing to risk their lives and their freedom to save money on an Uber, it's not hard to believe that millions of people would be happy to buy beautiful waterfront property.
The risks are known but not totally apparent.
There’s also this notion of normalcy bias: even if I accept the risk in the abstract, I genuinely believe it won’t happen to me personally.
https://en.m.wikipedia.org/wiki/Normalcy_bias
https://en.m.wikipedia.org/wiki/Normalcy_bias
The German stock market produced excellent gains in 1933-41. When the Nazi government closed the stock exchange after Stalingrad, the index was near its all-time high. (When the market finally reopened in 1948, German companies were valued some 80% lower.)
Even in large aggregates, investment decisions are ultimately made by people with their own biases. Markets are not infallible predictors of anything.
Even in large aggregates, investment decisions are ultimately made by people with their own biases. Markets are not infallible predictors of anything.
There’s some degree of risk-shifting, too, right? Since insurance is a precondition for a mortgage and therefore for homeownership (the way Americans like to do it, anyway), states are wont to arrange an “insurer of last resort” that supports the excessive risk through industrywide levies and is ultimately backed by the public purse. So in effect a chunk of that risk is being socialized.
For that matter while some people are rich and flinging money at “expensive waterfront homes,” it seems like most of the people who are being nonrenewed here would have made their decisions before the risk environment shifted in these ways that their insurers are now moving to price in.
Forcing people out of their homes is always going to be painful and ugly; and it’s always going to be politically popular to “keep insurance rates down,” further blunting the raw, market-based risk signal in ways both blunt and subtle.
From a market-level view, that looks impure and improper. From a human, family-level point of view, it’s hard not to sympathize with people who feel like they did everything right, only to have their biggest asset, the totem of generational security that they worked their entire lives for, suddenly turn toxic.
Just as this Times article demonstrates, a lot of these folks don’t have a whole lot of attractive alternatives available to them by the time they’re in this situation. And this market, more than most, seems to come down to deeply human stories, and to images of sympathetic families paying the price for developers’ profligacy.
For that matter while some people are rich and flinging money at “expensive waterfront homes,” it seems like most of the people who are being nonrenewed here would have made their decisions before the risk environment shifted in these ways that their insurers are now moving to price in.
Forcing people out of their homes is always going to be painful and ugly; and it’s always going to be politically popular to “keep insurance rates down,” further blunting the raw, market-based risk signal in ways both blunt and subtle.
From a market-level view, that looks impure and improper. From a human, family-level point of view, it’s hard not to sympathize with people who feel like they did everything right, only to have their biggest asset, the totem of generational security that they worked their entire lives for, suddenly turn toxic.
Just as this Times article demonstrates, a lot of these folks don’t have a whole lot of attractive alternatives available to them by the time they’re in this situation. And this market, more than most, seems to come down to deeply human stories, and to images of sympathetic families paying the price for developers’ profligacy.
I disagree. In my area several insurers have pulled out because of "fire risk" in areas with very little fire risk. (In one case, we're talking about a coastal home, well outside of any 100-year sea-level rise risk, where peak temperatures in the summer are typically in the 65 F, things never dry out, and the house is 4 blocks from the fire station.)
The problem is that the state mandates they use certain maps to assess risk, so the insurance company can't really use their own data to produce maps with higher resolution. So they pull out entirely rather than selling me insurance at a fair value.
That is NOT "the market working as intended". That is state regulation creating a market inefficiency, making people and businesses less able to actually adapt to climate change.
The problem is that the state mandates they use certain maps to assess risk, so the insurance company can't really use their own data to produce maps with higher resolution. So they pull out entirely rather than selling me insurance at a fair value.
That is NOT "the market working as intended". That is state regulation creating a market inefficiency, making people and businesses less able to actually adapt to climate change.
> we're talking about a coastal home, well outside of any 100-year sea-level rise risk, where peak temperatures in the summer are typically in the 65 F
If you're talking about a coastal California home, the risk you're facing is the overall risk across California as a whole. The California insurance regulator is requiring insurers to continue to offer coverage in fire-prone areas in addition to fire-rare areas. All insurance products are based on statistical averages. This is a question of what homes are included in that statistical average. If insurers are required to offer products to customers in fire-prone areas, then insurers need to include statistics on fire-prone area homes when pricing for all other homes.
If California changes its rules and stops requiring insurers to offer insurance in fire-prone areas, huge regions of California would become uninsurable for fire, which means mortgages cease to be available in those regions, which means housing prices collapse, which means politicians and the state insurance regulator get voted out of office.
For elected officials, if the choice is whether to have all non-fire-area homeowners somewhat pissed or to have all fire-area homeowners carrying pitchforks into the legislature, they'll take the somewhat pissed option every time.
If you're talking about a coastal California home, the risk you're facing is the overall risk across California as a whole. The California insurance regulator is requiring insurers to continue to offer coverage in fire-prone areas in addition to fire-rare areas. All insurance products are based on statistical averages. This is a question of what homes are included in that statistical average. If insurers are required to offer products to customers in fire-prone areas, then insurers need to include statistics on fire-prone area homes when pricing for all other homes.
If California changes its rules and stops requiring insurers to offer insurance in fire-prone areas, huge regions of California would become uninsurable for fire, which means mortgages cease to be available in those regions, which means housing prices collapse, which means politicians and the state insurance regulator get voted out of office.
For elected officials, if the choice is whether to have all non-fire-area homeowners somewhat pissed or to have all fire-area homeowners carrying pitchforks into the legislature, they'll take the somewhat pissed option every time.
> The problem is that the state mandates they use certain maps to assess risk, so the insurance company can't really use their own data to produce maps with higher resolution.
Are there particular reason(s) why this is being mandated? Can you point to particular examples of these mandates?
Are there particular reason(s) why this is being mandated? Can you point to particular examples of these mandates?
[deleted]
Is another regulation is also preventing the insurers from raising your insurance rates to cover the "fire risk"? Otherwise I'd say the insurer isn't acting logically. I guess I should've said that I believe the insurance companies are acting logically (and thus I don't blame them) instead of saying that the market behaving as it should.
Part of the issue is state boundaries (at least in the US case).
If someone moves from Florida to Georgia, or California to Colorado, then the former state loses their tax base (even in FL: sales/corporate tax).
So it sets up a musical chairs scenario where the state in question has every incentive to keep the game going.
Which will ultimately mean (a) using state revenue to balance out insurance plans and/or (b) outright fraud and shifting the risk burden onto someone else (looking at you and Fannie/Freddie, Florida).
If someone moves from Florida to Georgia, or California to Colorado, then the former state loses their tax base (even in FL: sales/corporate tax).
So it sets up a musical chairs scenario where the state in question has every incentive to keep the game going.
Which will ultimately mean (a) using state revenue to balance out insurance plans and/or (b) outright fraud and shifting the risk burden onto someone else (looking at you and Fannie/Freddie, Florida).
Could you elaborate about the outright fraud by Freddie Mac? This is a genuine request for information.
Not OP, but GSEs are transferring unknown climate risk to investors (and potentially taxpayers if a bailout is required) by not updating their insurance guidelines around climate risk models and the mortgages they securitize for sale into the bond market. Insurance repricing or wholesale refusing to underwrite a territory is the leading indicator of stress, because they can move the fastest (versus mortgage market regulators, federal flood data mapping, etc).
TLDR There is an enormous amount of unpriced risk between GSE securities and potential insurance liabilities everyone is attempting to ignore.
https://www.nytimes.com/2024/12/07/business/economy/mortgage... | https://archive.today/wVcoy
> Mortgage Regulators Are Shrugging Off Climate Risk. It Could Cost Taxpayers Billions.
> Fannie Mae and Freddie Mac, which backstop most U.S. mortgages, know floods and fires are a growing problem. But little action has been taken.
https://www.richmondfed.org/publications/research/economic_b...
> The increasing frequency and intensity of extreme weather events present potential risks to real estate finance. It has been argued that mortgage lenders may be able to securitize and sell mortgages that are more exposed to risks of flooding to government-sponsored enterprises (GSEs). This possibility arises from two factors: the limited spatial variation in GSE guarantee fees (e.g., the fees are similar between houses with different flood risks) and the fact that GSE insurance mandates rely on outdated floodplain maps (which may fail to account for predicted increases in flood risks over the next 30 years). If this is the case, then there may be a concentration of flood risks at the GSEs, which play an important role in guaranteeing the stability of the mortgage market.
> However, the flood risk exposure of the portfolios of mortgages backed (purchased or guaranteed) by GSEs — specifically Fannie Mae and Freddie Mac — remains unknown. This article summarizes my examination of projected flood-risk exposures and the actual impacts of Hurricane Irma on mortgage defaults, documented in detail in my recent working paper "Leveraging the Disagreement on Climate Change: Theory and Evidence," co-authored with Laura Bakkensen and Russell Wong.
> Our first finding focuses on the GSE exposure to future flood risks. Restricting our attention to mortgages outstanding in 2023, the following table summarizes GSE portfolio exposure to future flood risk. We estimate that more than a quarter of outstanding mortgages — or more than 23 million loans, with a total outstanding balance of more than $2 trillion dollars — are at risk of future flooding, defined in this subsection as lying in a ZIP code with an average flood factor of at least 2.5 A smaller fraction (nearly 6 percent) are at higher risk, defined as lying in a ZIP code with an average flood factor of at least 3.
https://www.newyorkfed.org/medialibrary/media/research/confe...
> Conclusion:
> Mis-calibrated GSE insurance requirements → growth of fragile insurers.
> GSEs bear large unpriced exposure to climate due to insurance risk → taxpayer externality.
> Too much GSE mortgage origination in risky areas → distorted credit supply.
TLDR There is an enormous amount of unpriced risk between GSE securities and potential insurance liabilities everyone is attempting to ignore.
https://www.nytimes.com/2024/12/07/business/economy/mortgage... | https://archive.today/wVcoy
> Mortgage Regulators Are Shrugging Off Climate Risk. It Could Cost Taxpayers Billions.
> Fannie Mae and Freddie Mac, which backstop most U.S. mortgages, know floods and fires are a growing problem. But little action has been taken.
https://www.richmondfed.org/publications/research/economic_b...
> The increasing frequency and intensity of extreme weather events present potential risks to real estate finance. It has been argued that mortgage lenders may be able to securitize and sell mortgages that are more exposed to risks of flooding to government-sponsored enterprises (GSEs). This possibility arises from two factors: the limited spatial variation in GSE guarantee fees (e.g., the fees are similar between houses with different flood risks) and the fact that GSE insurance mandates rely on outdated floodplain maps (which may fail to account for predicted increases in flood risks over the next 30 years). If this is the case, then there may be a concentration of flood risks at the GSEs, which play an important role in guaranteeing the stability of the mortgage market.
> However, the flood risk exposure of the portfolios of mortgages backed (purchased or guaranteed) by GSEs — specifically Fannie Mae and Freddie Mac — remains unknown. This article summarizes my examination of projected flood-risk exposures and the actual impacts of Hurricane Irma on mortgage defaults, documented in detail in my recent working paper "Leveraging the Disagreement on Climate Change: Theory and Evidence," co-authored with Laura Bakkensen and Russell Wong.
> Our first finding focuses on the GSE exposure to future flood risks. Restricting our attention to mortgages outstanding in 2023, the following table summarizes GSE portfolio exposure to future flood risk. We estimate that more than a quarter of outstanding mortgages — or more than 23 million loans, with a total outstanding balance of more than $2 trillion dollars — are at risk of future flooding, defined in this subsection as lying in a ZIP code with an average flood factor of at least 2.5 A smaller fraction (nearly 6 percent) are at higher risk, defined as lying in a ZIP code with an average flood factor of at least 3.
https://www.newyorkfed.org/medialibrary/media/research/confe...
> Conclusion:
> Mis-calibrated GSE insurance requirements → growth of fragile insurers.
> GSEs bear large unpriced exposure to climate due to insurance risk → taxpayer externality.
> Too much GSE mortgage origination in risky areas → distorted credit supply.
Tagging this previous HN submission on: https://news.ycombinator.com/item?id=41664750
tl;dr - When insurers pull out, Florida creates some new insurers, rubber stamps them as financially solvent (even though they're not), these new entities insure properties, and then banks can originate new mortgages (because the properties are insurable) before rapidly transferring them to Fannie/Freddie (as they're secretly trash, but compliant). End result if properties are flooded, demolished, or burned? Insurers go bust and leave Fannie/Freddie holding the bag (the mortgage, now with no property securing it).
tl;dr - When insurers pull out, Florida creates some new insurers, rubber stamps them as financially solvent (even though they're not), these new entities insure properties, and then banks can originate new mortgages (because the properties are insurable) before rapidly transferring them to Fannie/Freddie (as they're secretly trash, but compliant). End result if properties are flooded, demolished, or burned? Insurers go bust and leave Fannie/Freddie holding the bag (the mortgage, now with no property securing it).
The other hand, while very sad, is an investment mistake of each individual. 'How could I have known' is same as complaining certain stocks lost its value unexpectedly and retirement savings are now halved. In fact, most of these places were not OK decades ago but folks love cheap real estate and who gives a fuck about some doomsaying science, the cheaper the better, what could go wrong right?
Either insurances mark given county incorrectly, and some competition will eventually catch up or they marked it correctly. Now just because somebody invested in bad property (or property became bad), why should some private company bear this mistake outside contract? I don't see a reason, I wouldn't do it neither.
Real estate, often massive, ain't some Geneva convention-enforced basic human right, just an investment. Maybe good old 'if its too good to be true maybe it isn't' mantra is valid also here? Be smart folks, not greedy.
Also if the home on photos is really the one article is about, I don't see any meaningful bushfire protection. That would be at least 30 meter clear cut perimeter with just rocks between forest and house - no dry grass, pine needles etc. I see forest literally ending next to house itself, thus actual 0 protection. Yeah in a frequent fire country that house is a disaster waiting to happen soon.
Either insurances mark given county incorrectly, and some competition will eventually catch up or they marked it correctly. Now just because somebody invested in bad property (or property became bad), why should some private company bear this mistake outside contract? I don't see a reason, I wouldn't do it neither.
Real estate, often massive, ain't some Geneva convention-enforced basic human right, just an investment. Maybe good old 'if its too good to be true maybe it isn't' mantra is valid also here? Be smart folks, not greedy.
Also if the home on photos is really the one article is about, I don't see any meaningful bushfire protection. That would be at least 30 meter clear cut perimeter with just rocks between forest and house - no dry grass, pine needles etc. I see forest literally ending next to house itself, thus actual 0 protection. Yeah in a frequent fire country that house is a disaster waiting to happen soon.
The photos are not representative of the kind of homeowner who does all the prescribed mitigation yet still doesn’t gain on premiums or coverage.
In Colorado, the maps are fairly transparent, yet I get the feeling that mitigation work is ineffective within predictions based on newer data.
https://archive.ph/O8j2m
In Colorado, the maps are fairly transparent, yet I get the feeling that mitigation work is ineffective within predictions based on newer data.
https://archive.ph/O8j2m
> The climate is changing and is affecting regions we knew would be impacted by climate change 30+ years ago. The insurance companies cannot make a profit (and thus would not choose to operate) in these areas now that they're being impacted by climate change. On one hand this seems like the market working exactly as it should be. People should've moved out of these regions in the last 30 years given the information about climate change, but they didn't.
The businesses[1] invest in fossil fuels. Meanwhile the humans keep living in dead-end locations for emotional and illiquid nonsense reasons, like “my parents” or “my job” or “stability for my children’s upbringing”. Then when the stove gets too hot Capital can just move. No skin off its back.
Yeah that sounds exactly like the market that I know is supposed to be working.
[1] https://news.ycombinator.com/item?id=42450560
The businesses[1] invest in fossil fuels. Meanwhile the humans keep living in dead-end locations for emotional and illiquid nonsense reasons, like “my parents” or “my job” or “stability for my children’s upbringing”. Then when the stove gets too hot Capital can just move. No skin off its back.
Yeah that sounds exactly like the market that I know is supposed to be working.
[1] https://news.ycombinator.com/item?id=42450560
This isn't because of climate change. It's because of bad laws combined with the housing chickens coming home to roost.
On the legislation front, a series of court cases and legislation combined with weak oversight meant that something like 70% of the nation's roof insurance claims were in Florida. There was clear fraud in many cases. Because of this legislation was introduced that made it difficult for any homeowner to file a legitimate claim. Combine this with under-capitalization by insurers and weak oversight and it's just a mess.
But the big one is housing. It's too expensive. And this is another inevitable consequence. It used to be that housing depreciated. That no longer seems to be the case. The replacement value is only going up. This is the foreseeable outcome of years of government policy designed to increase home values.
Ultimately we need to stop treating housing as an investment, as your retirement nest egg. All this does is steal from the next generation. That's it. Withholding shelter (ie housing) either by limiting supply through regulation and legislation or simply by pricing people out is state violence.
Housing prices need to come down. Hoarding housing needs to be massively disincentivized. We need to stop giving massive tax breaks to homeowners. None of this is popular but without major reform we're headed down a bad road.
Canada is heading towards crisis at the moment and many of its problems can be tied directly back to soaring house prices.
The consequences of high house prices are everywhere too. More expensive commercial real estate means businesses need to recoup that cost through higher prices.
On the legislation front, a series of court cases and legislation combined with weak oversight meant that something like 70% of the nation's roof insurance claims were in Florida. There was clear fraud in many cases. Because of this legislation was introduced that made it difficult for any homeowner to file a legitimate claim. Combine this with under-capitalization by insurers and weak oversight and it's just a mess.
But the big one is housing. It's too expensive. And this is another inevitable consequence. It used to be that housing depreciated. That no longer seems to be the case. The replacement value is only going up. This is the foreseeable outcome of years of government policy designed to increase home values.
Ultimately we need to stop treating housing as an investment, as your retirement nest egg. All this does is steal from the next generation. That's it. Withholding shelter (ie housing) either by limiting supply through regulation and legislation or simply by pricing people out is state violence.
Housing prices need to come down. Hoarding housing needs to be massively disincentivized. We need to stop giving massive tax breaks to homeowners. None of this is popular but without major reform we're headed down a bad road.
Canada is heading towards crisis at the moment and many of its problems can be tied directly back to soaring house prices.
The consequences of high house prices are everywhere too. More expensive commercial real estate means businesses need to recoup that cost through higher prices.
I’m glad to hear mention of roofing claims finally. I live in Florida, my insurance shot up. No claims, I live away from the water. I paid for my own roof. But a lot of people around me got free roofs, and I remember getting constant calls for “free roof inspections.”
Totally agree. Same issues in the UK too.
House prices are a cancer on society
House prices are a cancer on society
The issue here has less to do with climate change itself and more to do with a combination of regulatory and economic factors. While left-leaning outlets might point to climate change as the primary cause, the reality is more nuanced—similar issues are visible in other sectors, such as health insurance. Here are a few key points to consider:
- Insurance Company Consolidation: As the industry consolidates, large insurers gain the ability to strategically drop unprofitable market segments. This allows them to improve profitability, but it often leaves consumers in those markets with fewer or no options.
- Regulations: Some states, like California, have introduced stringent requirements that compel insurers to continue providing coverage, even in high-risk areas. In response, many insurers have opted to exit these markets entirely. Consolidation has made this easier for them to implement at scale.
- Lack of Investment in Disaster Prevention: Across both Democrat- and Republican-led states, we’ve seen a decline in state and federal spending on preventive measures for natural disasters. This shortfall exacerbates the risks insurers face, further disincentivizing them from operating in high-risk areas.
- Insurance Company Consolidation: As the industry consolidates, large insurers gain the ability to strategically drop unprofitable market segments. This allows them to improve profitability, but it often leaves consumers in those markets with fewer or no options.
- Regulations: Some states, like California, have introduced stringent requirements that compel insurers to continue providing coverage, even in high-risk areas. In response, many insurers have opted to exit these markets entirely. Consolidation has made this easier for them to implement at scale.
- Lack of Investment in Disaster Prevention: Across both Democrat- and Republican-led states, we’ve seen a decline in state and federal spending on preventive measures for natural disasters. This shortfall exacerbates the risks insurers face, further disincentivizing them from operating in high-risk areas.
> The issue here has less to do with climate change itself and more to do with a combination of regulatory and economic factors.
The issue is not that the insurance regulations have tightened or changed. The issue is that the climate risks have heightened and the regulations have NOT changed to match the heightened climate risks.
Small increases in average temperature of the air leads to large decreases in average moisture content of brush and vegetation, making fires more common and more likely to impact more homes. The insurers have the data, that's why they are acting the way they are. Fires are more common and fires are larger. Not politics. Actuarial data compiled by insurance companies. If you've spent any time with insurance CEOs, you'll know they are not bleeding heart liberals. They tend to be very conservative and very data driven. And they have the data and it impacts their business.
The regulatory issue is that, to prevent historical forms of bad behavior on the part of insurers, state regulators require that insurers can only set pricing for fire insurance (for example) on the basis of historical data, not on the basis of forward-looking projections. That's the right thing for regulators to do in normal circumstances, when the risk environment isn't changing, but if the risk environment is changing it means you as an insurer will need to pay out money in the future at a higher rate than you did in the past, but you can only collect money based on lower historical payout rates. You are, in practice, required by the regulators to now offer your product at a loss not because the regulations changed but because the average daily temperature is increasing ever so slightly but just enough to significantly increase your cost. You don't want to offer a product at a loss, so you leave the market.
As to why insurance is a regulated industry, in large part that's because insurance is one of the few products the government requires you to purchase, distorting the market, and also in large part because there are massive asymmetries of information between consumer and provider - insurance companies have much more information about risks than insurance customers do, which prior to regulation led to abusive practices on the part of the insurers, in ways that led voters to say "this is a problem that needs to be fixed."
All big problems are hard, and insurance regulation is a big hard problem. If you just say "the environment is changing, so insurers should be able to set prices based on forward-looking projections" you help with the climate pricing increases but are likely to get other unrelated bad behavior at the same time (forward-looking projections are notoriously easy to fudge or fake in ways that are massively favorable to the person making the projections). If you don't allow for forward-looking projections, you lose insurers, if you do allow for it, you get abuses. "Just do it the right way" is much easier to demand in a blog post or comment thread than it is to deliver in legislation.
The issue is not that the insurance regulations have tightened or changed. The issue is that the climate risks have heightened and the regulations have NOT changed to match the heightened climate risks.
Small increases in average temperature of the air leads to large decreases in average moisture content of brush and vegetation, making fires more common and more likely to impact more homes. The insurers have the data, that's why they are acting the way they are. Fires are more common and fires are larger. Not politics. Actuarial data compiled by insurance companies. If you've spent any time with insurance CEOs, you'll know they are not bleeding heart liberals. They tend to be very conservative and very data driven. And they have the data and it impacts their business.
The regulatory issue is that, to prevent historical forms of bad behavior on the part of insurers, state regulators require that insurers can only set pricing for fire insurance (for example) on the basis of historical data, not on the basis of forward-looking projections. That's the right thing for regulators to do in normal circumstances, when the risk environment isn't changing, but if the risk environment is changing it means you as an insurer will need to pay out money in the future at a higher rate than you did in the past, but you can only collect money based on lower historical payout rates. You are, in practice, required by the regulators to now offer your product at a loss not because the regulations changed but because the average daily temperature is increasing ever so slightly but just enough to significantly increase your cost. You don't want to offer a product at a loss, so you leave the market.
As to why insurance is a regulated industry, in large part that's because insurance is one of the few products the government requires you to purchase, distorting the market, and also in large part because there are massive asymmetries of information between consumer and provider - insurance companies have much more information about risks than insurance customers do, which prior to regulation led to abusive practices on the part of the insurers, in ways that led voters to say "this is a problem that needs to be fixed."
All big problems are hard, and insurance regulation is a big hard problem. If you just say "the environment is changing, so insurers should be able to set prices based on forward-looking projections" you help with the climate pricing increases but are likely to get other unrelated bad behavior at the same time (forward-looking projections are notoriously easy to fudge or fake in ways that are massively favorable to the person making the projections). If you don't allow for forward-looking projections, you lose insurers, if you do allow for it, you get abuses. "Just do it the right way" is much easier to demand in a blog post or comment thread than it is to deliver in legislation.
> The insurers have the data, that's why they are acting the way they are. Fires are more common and fires are larger.
Fires in the USA are far less common than they were 100 years ago. Here's a rendered graph of data from the US National Interagency Fire Center:
https://imgur.com/a/MZMmc06
Fires in the USA are far less common than they were 100 years ago. Here's a rendered graph of data from the US National Interagency Fire Center:
https://imgur.com/a/MZMmc06
The cool thing is that private insurers invest heavily in fossil fuel.
https://consumerwatchdog.org/insurance/top-10-us-insurance-c...
https://consumerwatchdog.org/insurance/top-10-us-insurance-c...
Property insurers are even more intense about it than life and business insurers. Berkshire Hathaway and State Farm Insurance are each something like $100B in fossil fuels.
Isn't that just how they hedge bets? Their performance is correlated with the claims they receive. If fossil fuels perform poorly -> less environmental damage -> less claims. And vice versa
Unfortunately this article is a miss as it does not compare those investments to their entire portfolio size. Renewables have made great strides but the world still runs on the backs of fossil fuels.
As it's only tangentially mentioned in the article people should know that in many (most?) places insurers can't raise prices commensurate with risk making "nonrenewal" their only option.
These regulations have reasonable origins because as a mandated product it's pretty tempting to price gouge, but there's no exception for circumstances where the price really should be 3x the historical cost.
These regulations have reasonable origins because as a mandated product it's pretty tempting to price gouge, but there's no exception for circumstances where the price really should be 3x the historical cost.
This is the massive failure that exists in many states. You are unable to raise rates but the risk has increased and premiums must increase. Both CA and FL are huge losers in this regard. Heavy regulation on rate increases but then happy to create underfunded state policies for their constituents.
Root cause is that wages cannot sustain climate liabilities (insurance costs) that have been incurred by decades of fossil fuel strategy. People also can't afford to move, it is costly to build new housing due to labor and material costs. Bit of a death spiral all around.
So if property price drops completely because insurance do not want to insure, it should make buying houses in cash and avoid mortgage easier right? House becomes a cheap commodity, everybody can then buy a house again, insurers can insure them again because they are cheap. The market correct itself.
Problem solved?
Problem solved?
In theory, sure. In reality the racket between insurers, government and banking will find strings to pull so that that never happens. They're in on every deal. They're gonna fight tooth and nail to prevent the precedent of getting cut out.
I don't think it's fundamentally uneconomical to live in these places. It's just uneconomical in the current "nobody has any responsibility for anything it's all just financialized away" status quo in which it's ok to have plastic siding over a plastic-wood structure and shrubbery all about status quo. People will have to return to the "old ways" of corrugated steel, clapboard (or masonry or cement board) and super short grass and dirt for large distances around structures.
I don't think it's fundamentally uneconomical to live in these places. It's just uneconomical in the current "nobody has any responsibility for anything it's all just financialized away" status quo in which it's ok to have plastic siding over a plastic-wood structure and shrubbery all about status quo. People will have to return to the "old ways" of corrugated steel, clapboard (or masonry or cement board) and super short grass and dirt for large distances around structures.
Everyone (with some degree of savings, which really isn't everyone) will be able to buy a house in an area where that housing and local infrastructure will be regularly devastated. Areas with a more amenable climate will continue to have insurable mortgages and inaccessible housing prices.
So if the 'problem' is _simply_ that people can't buy houses, I guess it's solved? If one words it more carefully - people can't buy houses that allow for a greater degree of economic stability and wealth accumulation - then no, problem not at all solved.
So if the 'problem' is _simply_ that people can't buy houses, I guess it's solved? If one words it more carefully - people can't buy houses that allow for a greater degree of economic stability and wealth accumulation - then no, problem not at all solved.
They'd need to be so cheap that rebuilding (or maybe even repairing) are not things people would care to do. For a $40k house, in today's dollars, it might just be a risk I wouldn't care to rebuild if there's massive damage; just move away. Someone would have to take care of cleanup/removal though.
I see where you're going, and sort of think it could happen in some areas, but regulations might not permit that any time soon, even if 'pure' market conditions might call for it.
Interesting to think what this might do for the 'tiny house' market. Start zoning more places where people can put up $30k tiny houses. You might still need insurance for protection against personal injury on/in the property, but rebuild/repair wouldn't need to be a factor.
I see where you're going, and sort of think it could happen in some areas, but regulations might not permit that any time soon, even if 'pure' market conditions might call for it.
Interesting to think what this might do for the 'tiny house' market. Start zoning more places where people can put up $30k tiny houses. You might still need insurance for protection against personal injury on/in the property, but rebuild/repair wouldn't need to be a factor.
There are ways to build flood-resistant houses... as long as the flood doesn't take too much of the ground away.
I have no idea what is the situation there, but there are also ways to preserve the ground against floods.
It's all about determining what is better, preventing the damage or abandoning the place.
I have no idea what is the situation there, but there are also ways to preserve the ground against floods.
It's all about determining what is better, preventing the damage or abandoning the place.
"A deal too good to be true" will reveal it's ugly head in this case. Insurance wants to cover a near sure thing. You can trick buyers into buying something uninsurable, once. And then they'll be forced to sell at a large loss. Once those stories start making it into media buyers will be far more cautious.
Most likely, these houses will get bought by corporations to be rented out. They'll have the resources to self-insure. And at the next natural disaster the building falls down, renters are homeless, and what gets built in it's place will be 2x the price.
Most likely, these houses will get bought by corporations to be rented out. They'll have the resources to self-insure. And at the next natural disaster the building falls down, renters are homeless, and what gets built in it's place will be 2x the price.
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> insurers can insure them again because they are cheap
I believe the main part of what the insurance payout covers is rebuilding. And rebuilding is what's expensive, moreso now than ever. So I think housing prices would crash in an uninsurable area because you might be able to buy cheaply, but you couldn't afford to rebuild when something happens.
In the end, we'll all be climate refugees?
I believe the main part of what the insurance payout covers is rebuilding. And rebuilding is what's expensive, moreso now than ever. So I think housing prices would crash in an uninsurable area because you might be able to buy cheaply, but you couldn't afford to rebuild when something happens.
In the end, we'll all be climate refugees?
trailers are cheap to deliver
>Problem solved?
It depends if the problem is the insurance or the climate
It depends if the problem is the insurance or the climate
>House becomes a cheap commodity,
Houses can't become a "cheap commodity" unless there are revolutionary new construction methods and/or alternative materials. E.g. something like cheap 3D printing of structural walls, ubiquitous robots, pre-fab modular rooms and roofs, etc and cheaper material alternatives to wood, concrete, tile, asphalt shingles.
Without a technological leap, traditional construction techniques will always have the baseline costs of paying expensive humans to rebuild the property. The labor costs of carpenters, plumbers, electricians, HVAC installers, roofers is ~50% or more of a house construction budget.
This means houses will always be "expensive" in relation to the average Starbuck's barista paycheck because of Baumol's "Cost Disease": https://en.wikipedia.org/wiki/Baumol_effect
Put another way, we've known for several hundred years in math that the derivative of x^2 is 2x. Disseminating that knowledge should be cheap. And yet the cost(salaries) of calculus teachers and math professors (and the associated textbooks) keep going up instead of down. That's the "cost disease" similar with building houses.
That's why a bunch of insurers abandoning the market doesn't won't change the economics enough for houses to become cheap commodities. Houses prices may adjust with lower sales prices but it still won't drop to "cheap commodities" level pricing. e.g. Florida condos' prices drastically fall because the Surfside collapse triggers law requiring millions in maintenance and rising hurricane insurance rates ... Starbucks baristas still can't afford those discounted condos.
However, to your point about "market forces" creating a new equilibrium in prices... you can buy houses in Detroit for $1 but that does come with other issues:
https://old.reddit.com/r/explainlikeimfive/comments/1ja3lm/e...
https://www.quora.com/Is-there-a-catch-to-buying-the-1-homes...
Houses can't become a "cheap commodity" unless there are revolutionary new construction methods and/or alternative materials. E.g. something like cheap 3D printing of structural walls, ubiquitous robots, pre-fab modular rooms and roofs, etc and cheaper material alternatives to wood, concrete, tile, asphalt shingles.
Without a technological leap, traditional construction techniques will always have the baseline costs of paying expensive humans to rebuild the property. The labor costs of carpenters, plumbers, electricians, HVAC installers, roofers is ~50% or more of a house construction budget.
This means houses will always be "expensive" in relation to the average Starbuck's barista paycheck because of Baumol's "Cost Disease": https://en.wikipedia.org/wiki/Baumol_effect
Put another way, we've known for several hundred years in math that the derivative of x^2 is 2x. Disseminating that knowledge should be cheap. And yet the cost(salaries) of calculus teachers and math professors (and the associated textbooks) keep going up instead of down. That's the "cost disease" similar with building houses.
That's why a bunch of insurers abandoning the market doesn't won't change the economics enough for houses to become cheap commodities. Houses prices may adjust with lower sales prices but it still won't drop to "cheap commodities" level pricing. e.g. Florida condos' prices drastically fall because the Surfside collapse triggers law requiring millions in maintenance and rising hurricane insurance rates ... Starbucks baristas still can't afford those discounted condos.
However, to your point about "market forces" creating a new equilibrium in prices... you can buy houses in Detroit for $1 but that does come with other issues:
https://old.reddit.com/r/explainlikeimfive/comments/1ja3lm/e...
https://www.quora.com/Is-there-a-catch-to-buying-the-1-homes...
> you can buy houses in Detroit for $1 but that does come with other issues:
What neither of your links mention is that these are tax foreclosures or similar transaction and you are typically also buying the liability of back taxes owed on top of all the downsides that the links mention.
What neither of your links mention is that these are tax foreclosures or similar transaction and you are typically also buying the liability of back taxes owed on top of all the downsides that the links mention.
One of my relatives has a single level house directly on a coastal waterway in Florida. Never had any problems since it was built in the 60s, then in 2 of the last 8 years the inside has gotten inundated with storm surge from a major hurricane, requiring a complete interior gutting. Their neighbors houses both got destroyed and now one is on stilts and the other is on a six foot mound.
He keeps repairing because he is a general contractor and the house has history to him.
He keeps repairing because he is a general contractor and the house has history to him.
>Communities that are deemed too dangerous to insure face the risk of falling property values, which means less tax revenue
Now that is the funnest quote I have seen in 2024. I would love to know what government will lower your property tax if your house value falls ?
I have never seen that happen ever nor do I know anyone who has seen that happen over the past 40 years.
Now that is the funnest quote I have seen in 2024. I would love to know what government will lower your property tax if your house value falls ?
I have never seen that happen ever nor do I know anyone who has seen that happen over the past 40 years.
It is tradition to contest the annual re-evaluations of the assessment of your home as that's exactly how your property taxes are based. The only time it is good for an owner's property's assessment to go up is when they are wanting to sell it. The rest of the time, they are constantly fighting to keep it low specifically because of taxes.
You must live in a state without property taxes, or you just have no idea how they work. Either way, this is exactly how property taxes work.
You must live in a state without property taxes, or you just have no idea how they work. Either way, this is exactly how property taxes work.
The assessed value of your home determines your share of the total tax to be collected.
If your assessed value goes down but all the rest stay the same, yes, your tax bill will go down. But if all assessed values go down by the same percentage, no your tax bill will not go down.
And this is the kicker: if all the houses close to the river or the seashore have their assessed value go down because of the flooding risk while all the other houses stay the same, their tax bills go up. So they really have a big incentive to not let that happen.
If your assessed value goes down but all the rest stay the same, yes, your tax bill will go down. But if all assessed values go down by the same percentage, no your tax bill will not go down.
And this is the kicker: if all the houses close to the river or the seashore have their assessed value go down because of the flooding risk while all the other houses stay the same, their tax bills go up. So they really have a big incentive to not let that happen.
In my state, homes are assessed using true cash value (TCV) when the property is sold and then the taxable value is adjusted annually. If the property values within a neighborhood decrease (e.g. due to uninsurability) then that would be reflected in the taxable value.
Take a look at Detroit and surrounding area property values in the late 1980s and 2008-2012.
Take a look at Detroit and surrounding area property values in the late 1980s and 2008-2012.
What state are you in? This is quite common in many parts of the country..
I do not want to ID the state, but I live above the mason-dixon line and east of PA.
The quote is tax revenue, not rates.
With such a significant drop in market value (can't get a mortgage on uninsurable property) the properties will just be abandoned, and twice as fast if the taxes aren't reassessed downward.
With such a significant drop in market value (can't get a mortgage on uninsurable property) the properties will just be abandoned, and twice as fast if the taxes aren't reassessed downward.
It is very common for a home owner to have their home value decrease.
Real estate is complicated but physical houses are depreciating assets - this is how rental properties are treated by landlords. Regular maintenance, land value, and market value usually offsets the depreciation.
"I would love to know what government will lower your property tax if your house value falls ?"
Plano, TX.
Plano, TX.
Why did you used all of those extra letters? TX would have sufficed
The climate firms are also faking data to protect their clients home values in places like Florida. The models are so wrong it's ridiculous. The amount of fraud going on from home insurance is astronomical.
What you mean by "climate firms"?
climate firms you got to be kidding me.
BIG CLIMA IS OUT TO GET YA.
BIG CLIMA IS OUT TO GET YA.
I agree, none of us knows what a climate firm even is though.
What ya really gotta watch out for are the weather firms.
I have a flood-prone coastal property (value a bit above median price for my city).
Anyone have ideas on how to invest in other securities/properties to self-insure?
Anyone have ideas on how to invest in other securities/properties to self-insure?
Home prices are too high to insure. This is for many many reasons.
Homes should be an expense, not an asset.
Homes should be an expense, not an asset.
Insurance is such a scam. Pay me money to cover your loss, except when I decide not to.
Meanwhile Desantis in Florida is spending $15M of taxpayer money to ensure books don’t say gay.
That 100 or so trans folks in prison can’t access the bathroom of their choice or get healthcare they need.
Millions spent on supposed woke war to show the Dems they are “anti-woke”.
Senator Rick Scott who was caught with pants down embezzling billions in insurance fraud was voted again.
Florida did this to themselves.
That 100 or so trans folks in prison can’t access the bathroom of their choice or get healthcare they need.
Millions spent on supposed woke war to show the Dems they are “anti-woke”.
Senator Rick Scott who was caught with pants down embezzling billions in insurance fraud was voted again.
Florida did this to themselves.
I hate the insurance industry so much, bros.
What I hate, most of all, is that it's so often mandated -- and, yet, at the same time, so complex and annoying to attain. Half the time I need to buy some BS insurance for my business, I can't even purchase it online, I need to fill out a 20-part form and then "Speak with an Agent," who will resist giving me all of my options and make purchasing a personal ordeal.
I had considered, in a half-serious way, setting up an "insurance" company (probably incorporated in Sealand) that sells "basic packages" for very low prices -- and when you "speak with an agent," explicitly tells its customers that it will never pay out any claims. It would be nothing more than a fig-leaf, so that you can tell third parties, "yeah, I have insurance, don't bother me about it."
It would probably be illegal, which is sad. I just don't want to be annoyed and don't like being forced to deal with grifters.
What I hate, most of all, is that it's so often mandated -- and, yet, at the same time, so complex and annoying to attain. Half the time I need to buy some BS insurance for my business, I can't even purchase it online, I need to fill out a 20-part form and then "Speak with an Agent," who will resist giving me all of my options and make purchasing a personal ordeal.
I had considered, in a half-serious way, setting up an "insurance" company (probably incorporated in Sealand) that sells "basic packages" for very low prices -- and when you "speak with an agent," explicitly tells its customers that it will never pay out any claims. It would be nothing more than a fig-leaf, so that you can tell third parties, "yeah, I have insurance, don't bother me about it."
It would probably be illegal, which is sad. I just don't want to be annoyed and don't like being forced to deal with grifters.
That's how it works in Poland. A client required me to get an insurance for my 1-person contracting company, and I was able to get a policy that only covers trivial things like spilling hot coffee on someone, but none of the software risks. The client was satisfied (they're a giant bureucracy, and the the contractor procurement people just needed any policy to be able to tick a box), while I spent minimal cash.
I would hate this, I think.
The relatively low (and I have to tick boxes for most of the high risk industries on the form) amount that I pay each year for what seems to be a nice PI policy is easily worth it for the peace of mind.
The relatively low (and I have to tick boxes for most of the high risk industries on the form) amount that I pay each year for what seems to be a nice PI policy is easily worth it for the peace of mind.
I would too I think, if I lived in the US. But the culture around law in Poland is pretty much opposite of the US. People just aren't lawsuit-happy, probably partially because the courts are inefficient and you can wait a long time for a verdict, and partially because the courts often don't award that much in those verdicts (and those absurd multi-million verdicts for trivial things that are a thing in the US would never happen here). Here, I've never heard of a software contractor even being sued by a client, let alone lose and have to pay anything - and I've been in the game for 20 years. First time I hear it does happen, I'll reconsider getting a better policy.
The requirement for the policy some clients have are only there because they're multinationals and it's a company-wide policy. Local clients never expect contractors to have a policy.
The requirement for the policy some clients have are only there because they're multinationals and it's a company-wide policy. Local clients never expect contractors to have a policy.
Yeah, that's fair too. Admittedly my work puts me into contact with relatively litigious parties.
I think at my current premiums I would need to pay insurance for 100 or 1000 years to even get close to the sort of numbers that get thrown around for a day's worth of damages on some of these projects.
The likelihood is absolutely that nothing serious will go wrong, that if it did it wouldn't make it to the courts and furthermore that if it did it wouldn't be negligence of any kind, or was covered within the contract itself.
But the thought of having skipped out given the possible consequences; No thanks, value my sleep too much.
I think at my current premiums I would need to pay insurance for 100 or 1000 years to even get close to the sort of numbers that get thrown around for a day's worth of damages on some of these projects.
The likelihood is absolutely that nothing serious will go wrong, that if it did it wouldn't make it to the courts and furthermore that if it did it wouldn't be negligence of any kind, or was covered within the contract itself.
But the thought of having skipped out given the possible consequences; No thanks, value my sleep too much.
I would love it.
As things are now, I'm mandated to spend $XXXX/year on insurance that I've never used and know, for a near certainty, that I'm never going to use. I'd really rather not. I've looked at the statistics and, for me, it's a better bet to eschew insurance. (Which, generally speaking, it would have to be, otherwise the insurance industry would be losing money.)
As things are now, I'm mandated to spend $XXXX/year on insurance that I've never used and know, for a near certainty, that I'm never going to use. I'd really rather not. I've looked at the statistics and, for me, it's a better bet to eschew insurance. (Which, generally speaking, it would have to be, otherwise the insurance industry would be losing money.)
>know, for a near certainty, that I'm never going to use.
That's what most people say right up until they make a claim.
That's what most people say right up until they make a claim.
I don't want to make any claims, though. I'd be much happier in a position where I'm totally unable to make claims. (And don't have to deal with the insurance industry.)
I'd even pay good money for (de facto-) fake insurance, just so mandates and overly-bureaucratic clients/partners leave well enough alone.
I'd even pay good money for (de facto-) fake insurance, just so mandates and overly-bureaucratic clients/partners leave well enough alone.
I don't want to make any claims, though.
I think you're missing the point of why these "overly-bureaucratic clients" are insisting on insurance. I don't want you to have insurance to keep you safe, I need you to have insurance to keep me safe. When the widget you built for me breaks and damages my customer and I end up owing them €1m, I want to be able to recoup at least some of that cost from you. It won't be you making a claim on your insurance, but me (or rather my insurance company)
And as someone who used to be at one of those "overly-bureaucratic clients", we not only required (and checked) that you had insurance, but also that your insurance coverage was actually high enough for project in question.
I think you're missing the point of why these "overly-bureaucratic clients" are insisting on insurance. I don't want you to have insurance to keep you safe, I need you to have insurance to keep me safe. When the widget you built for me breaks and damages my customer and I end up owing them €1m, I want to be able to recoup at least some of that cost from you. It won't be you making a claim on your insurance, but me (or rather my insurance company)
And as someone who used to be at one of those "overly-bureaucratic clients", we not only required (and checked) that you had insurance, but also that your insurance coverage was actually high enough for project in question.
> When the widget you built for me breaks and damages my customer and I end up owing them €1m, I want to be able to recoup at least some of that cost from you.
I'm not sure that follows.
I build something, send it to you. You integrate it, test it, make it production-ready, and ship it. If something breaks in testing, that's pretty normal, and it would be on me to fix -- and presumably contractual agreements would preclude damages at that stage.
If something breaks after you ship it to your own customer, that really ain't my responsibility. If you try to make it my responsibility, it would be a matter for the courts and not a matter for insurance. If you're looking for a quick payout from insurance, or if you think that insurance companies are less motivated to defend claims in court, that's reasonable -- but it's by no means necessary, and certainly not a social good. Insurance sets up incentive problems that ought to be avoided.
I'm not sure that follows.
I build something, send it to you. You integrate it, test it, make it production-ready, and ship it. If something breaks in testing, that's pretty normal, and it would be on me to fix -- and presumably contractual agreements would preclude damages at that stage.
If something breaks after you ship it to your own customer, that really ain't my responsibility. If you try to make it my responsibility, it would be a matter for the courts and not a matter for insurance. If you're looking for a quick payout from insurance, or if you think that insurance companies are less motivated to defend claims in court, that's reasonable -- but it's by no means necessary, and certainly not a social good. Insurance sets up incentive problems that ought to be avoided.
it would be a matter for the courts and not a matter for insurance
The specifics of the contract is besides the point. Taking you to court is meaningless unless you also have insurance, since if you're a freelancer or small company there is no way to get any money out of you. You'll just declare bankruptcy and be on your way and we'd still be stuck with the bill, even if it was you that screwed up. You having insurance is insurance for your customers that they have some chance of recompense if you screw them in some sort of way.
The specifics of the contract is besides the point. Taking you to court is meaningless unless you also have insurance, since if you're a freelancer or small company there is no way to get any money out of you. You'll just declare bankruptcy and be on your way and we'd still be stuck with the bill, even if it was you that screwed up. You having insurance is insurance for your customers that they have some chance of recompense if you screw them in some sort of way.
rayiner(2)
Ahh, yes, the insurance industry, clearly in the thrall of the woke left.
If you draw all those events, the insurrance withdrawl, the perma-wars, the coups and djihadist groups on a globe, do they form a equatorial ring and can you measure the expansion rate of the red zone?
To save the climate, it is best to live on 20 to 30 square meters per person. So I always like it when people do not build new houses.
Currently, the living space per person is still expanding. Seems to be running into a wall or resources or deficit of clean energy.
On the other hand many of the people living in these regions don't really have the means to move away and they're the ones disproportionately affected by all of this.