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A comment on Is the World Becoming Uninsurable?. Parent comment

Re:Is the World Becoming Uninsurable? by qeternity on Friday January 17, 2025 @12:53PM (#42741138)
Which effectively means that anybody in a less risky area of California is just subsidizing those who live in the risky areas. Premia across the board will increase as a result.

Typical California redistribution...but this is from the bottom to the top.

[ Parent | on HN ]
Re:Is the World Becoming Uninsurable? by PaulDavisThe1st on Saturday January 18, 2025 @09:57AM (#42748816)
> Which effectively means that anybody in a less risky area of California is just subsidizing those who live in the risky areas.

Do you not understand that this is precisely how insurance works?

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Re:Is the World Becoming Uninsurable? by qeternity on Saturday January 18, 2025 @01:34PM (#42750305)
No. That’s not subsidization.

Of course insurance is about pooling risk. But subsidizing implies you’re doing it below market rates.

If I pay my market rate but still -EV insurance premium, I’m not subsidizing anyone. I’m just happy to pay for the convexity insurance provided.

If I have to pay 20% more than I otherwise would, because the insurance company can’t charge someone else 20% more, that is actual subsidization.

A subsidy distorts natural market forces. This is what I am talking about.

Don’t be so quick to be a dick.

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