layman_economics on Nostr: This recent California causes a lot of damage to a lot of people. And many of them ...
This recent California causes a lot of damage to a lot of people. And many of them don’t have the insurance that will help them recover from this tragedy too.
Why? Are the insurance premiums too expensive?
No!
In fact, the premiums are relatively cheap because the California government legally forces the companies to keep the price of premiums low.
Sounds good, right?
No!
Because the price of premiums is being kept so low, companies can’t make any profits selling insurance to the people in California, especially those living in ‘high-risk’ areas.
So, companies simply choose to not sell their insurance to the people, especially those living in ‘high-risk’ areas.
That’s why many people, whose houses were consumed by the fires, are uninsured.
These people are doubly miserable.
Not only did they lose their homes, they also don’t have the financial support (from any insurance programs) to help them rebuild their lives as well.
T-T
This is another example of governments meddling in the free market, causing things to get worse.
In fact, if the government did not legally force the companies to keep the price of premiums low, there wouldn’t be a lot of people living in ‘high-risk’ areas in the first place!
Because the premiums would be so expensive in the ‘high-risk’ areas, the only people choosing to live there will be the rich people.
Not only can this group of people afford the high premiums, even if they can’t, they will, most likely, be quite capable of rebuilding their lives after the fires (because they’re rich).
And because there are not a lot of rich people, the population density is the ‘high-risk’ areas will be quite low, making it easier to evacuate when the fires are burning.
These are some of the reasons why (I believe) the California government’s price control policy is (partly) to blame for the tragedy of many Californians.
#economics #california #fire #government #insurance
Why? Are the insurance premiums too expensive?
No!
In fact, the premiums are relatively cheap because the California government legally forces the companies to keep the price of premiums low.
Sounds good, right?
No!
Because the price of premiums is being kept so low, companies can’t make any profits selling insurance to the people in California, especially those living in ‘high-risk’ areas.
So, companies simply choose to not sell their insurance to the people, especially those living in ‘high-risk’ areas.
That’s why many people, whose houses were consumed by the fires, are uninsured.
These people are doubly miserable.
Not only did they lose their homes, they also don’t have the financial support (from any insurance programs) to help them rebuild their lives as well.
T-T
This is another example of governments meddling in the free market, causing things to get worse.
In fact, if the government did not legally force the companies to keep the price of premiums low, there wouldn’t be a lot of people living in ‘high-risk’ areas in the first place!
Because the premiums would be so expensive in the ‘high-risk’ areas, the only people choosing to live there will be the rich people.
Not only can this group of people afford the high premiums, even if they can’t, they will, most likely, be quite capable of rebuilding their lives after the fires (because they’re rich).
And because there are not a lot of rich people, the population density is the ‘high-risk’ areas will be quite low, making it easier to evacuate when the fires are burning.
These are some of the reasons why (I believe) the California government’s price control policy is (partly) to blame for the tragedy of many Californians.
#economics #california #fire #government #insurance