Skip to main content

Insurance companies will change the world

Several US states as suing FEMA because of the increased price and availability of catastrophic insurance.

State farm just announce it will no longer provide homeowners insurance to new customers in California.

Florida resident have seen a 300% increase in the cost of flood and hurricane insurance.

This is the thin wedge of a change that opponents to climat change policies didn’t see coming.  In the case of Florida the governor made things worse by being a pawn of the insurance industry. Still insurance is not a charity and when premiums are no longer sufficient to meet the cost of claims insurance companies walk away.

We should expect an expansion of this trend since State Farm has opened the door to outright quitting parts of the insurance market.  At the same time, but unconnected, FEMA is understood to be revising its ability to write catastrophic insurance policies across the country because of new financial pressures which arose from Congress’ now budget dramatically reducing FEMA’s ability to write new policies at any price, because in the same way the GOP has hamstrung the federal government’s discretionary spending it has effectively cut the insurance resources the FEMA had available.  Talk about funny!  Homeowners in Florida who support the GOP are being informed by FEMA that their floor insurance policies will not be renewed when the come to term!  

FEMA catastrophic insurance for floods, hurricane and earthquake is a separate business supported by the Federal government that just saw its resources shrink by 95%.  If it was not so tragic it would be funny.  The consequence of wanting less federal government is getting less federal government.

In other matters this will impact too.  As the Americans no longer patrol the Hormuz straits premium, because of Iran’s vessel seizures, have already risen by 40%. Eventuality, shippers will be told that they are insured as long as they don’t venture in the straits! 

Insurance costs will eventually kill the globalization because the Americans are no longer willing or able to fulfill that role.

It is the law of unintended consequences that rules the world and not some crazy policy.  No one in DC had clued on the idea that their success at cutting federal government spending would result in home owners no longer having catastrophic insurance.  BTW it also means that in certain parts of the country obtains a mortgage may be far more difficult.  

Comments

Popular posts from this blog

The end of Tesla?

 it takes a special kind of idiot, to think that he can antagonize his entire customer base, and think that it will not impact his business. When Elon Musk went to work for Donald Trump, and created the doge department, he antagonized every liberal, and these people represent 90% of his client base.That’s not a brilliant move. Now Elon Musk is worth hundreds of billions of dollar, so he shouldn’t care a great deal, however, he needs to care because of several other issues. The cyber truck has been a disaster, most have had to be recalled because of defective glue, it’s not a truck, it’s not a car, it’s noisy, relatively uncomfortable, but great as a development platform. What Tesla has learned in making car manufacturing more seamless is truly amazing. The problem was that Elon Musk was so pissed with the Democrats, and with Joe Biden, in particular because of some slight, which were just plain stupid too. By the way, that he decided to support with hundreds of millions of dollar, ...

Donald Trump‘s bad bargain

 The entire of 2023 and 2024 when Donald Trump was running for the White House, his mantra was no war, that the Ukraine conflict would be resolved in a day, and that he would do everything not to involve America and war. How the world has changed! He finds himself facing three conflicts; Ukraine, still going on almost 5 months after he became president. Gaza, an unspeakable crime against humanity, is obviously going to go all the way to its bitter end. And finally, Israel’s attack against Iran. It’s important to note, that Benjamin Netanyahu first indicated at the United nation that the Iranian were 3 to 5 years away from having the nuclear bomb. He made that statement in 1995. Therefore, no one is surprised that he uses the same two lines every so often. It’s entirely possible, that 30 years after he first announced it, that Iran has finally developed the bomb. It’s also remarkable that Iran, local power has been destroyed, from Yemen, to Syria, via Lebanon and Gaza to small exten...

TACO again, but worst!

 Donald Trump got the rare earth metals that he had thrown away on April 2, liberation day as he called it. What did the Chinese get in exchange? The whole deal, is on the wrap right now. But let’s be clear. It’s the Chinese that have the upper hand.Some of the materials made by the Chinese, are simply unavailable anywhere else. suspicions are that the Chinese got the high-end chips that they lost under Biden. Tariffs will probably return to the level of April 1, and in the end Donald and his friends got nothing for it. It gets worse, Chinese exports to United States are down 40%. The Chinese have found new markets, I probably never gonna buy American grain again. Once again, Donald Trump proved he’s a great negotiator. He got absolutely nothing for his Showmanship. He told the world, that everyone would come and kiss his ass, instead they’re laughing At him. There’s no joke about Donald Trump, a 25 and inherited a huge fortune and proceeded to make it a small one. Bottom line, the...