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D Egger's avatar

great article.

if we built houses intended to last 100 or 200 years we would not build them on dunes, in flood plains, or perched on the sides of mountains where the habitat has been formed by being regularly burnt over.

houses in the past 50 years have become a disposable luxury consumable item while the insurance industry is still structured as if houses were intended to be permanent.

it is not surprising that traditional insurers are giving up on many locations in the US - because buyers and builders have reneged on the implied promise of a house being expected to last indefinitely absent random very bad luck.

this is part of a larger trend in which the word "insurance" is now used to refer to expected wealth transfers in time rather than rare transfers due to randomness - health insurance being the prime example.

But the policy question behind your article is whether propping up a luxury market in disposable homes - often second or third homes on beaches and mountains - is an activity the government should be doing at all.

it may be that building and furnishing expensive disposable houses is good for GDP and employment - but when i see new houses that have almost no chance of standing in 100 or 200 years - and think of still beautiful buildings built 200+ years ago - it feels like our cultural lack of regard for the future is a bigger issue that a failure of our insurance regulatory schemes.

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Jennifer Warner's avatar

Wow. Thanks for the explanation. Many of us have been wondering.

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