The increasing number and intensity of disasters is causing many types of insurance, particularly flood and fire, to become scarcely available. We are beyond basic cost accounting at this point.

Flood insurance is immaterial to the arguments here considered. You buy it year by year, not in 40 year contracts. They will stop selling to you once your house is about to go underwater. Who would insure a house at the bottom of the ocean?

If your expected return from an insurance isn't negative, don't expect it to exist next year.

If an insurance company is guaranteed to have an $800,000 claim filed on their policy within the next 12 months because your house is already flooded, they won't sell you the policy.

That would work in an economic free market. Instead, the Feds force everyone else to subsidize flood insurance. https://www.floodsmart.gov/

Go get an insurance policy on a house that is currently underwater and tell me who gives you a quote. I'll send you $1000 if you do this.