Much of the Sacramento area used to flood naturally, and made excellent farmland. Then developers decided to build housing on concrete pads, with living area below flood level. They say it looks nicer, and they can sell it for more $ to people who don't want to climb stairs. One problem is, the old state program to compensate flood victims was budgeted mainly for farmers' crops, but now it's supposed to compensate vast housing tracts full of flat-screen TVs. Another problem is, a flood would create a huge disaster and disruption. So we spend a fortune building and reinforcing levees, and insuring against risks that shouldn't have been created or increased this way. It's been a huge subsidy for developers of really short-sighted construction, enabling superficial buyers to live in suburban sprawl with too little exercise. Building above flood level, whether apartment buildings or even two-story houses with the living area upstairs, would reduce the risk dramatically.
I say we do away with insurance all together and we just make everything "at your own risk". Everyone would be far better off. They could put those premiums in an *interest baring account, and have their own funds available for emergency when you need it. You know like it's been for ever, before we screwed it up.
Thank you for the cartoonish nonsensical tea party version, which is usually followed by getting all upset that someone might take your medicare away.
Now for the ultra left wing liberal version.
Insurance is by definition something that protects you against unforseen events like a car crash, cancer, etc, so we need to have it around. That being said, we do need to curb insuring things like building a house on land that floods every 10-15 years, and make the homeowner pay a premium that corresponds to the actual risk. They need to have skin in the game.
If you elect not to pay for insurance, and your home washes away, then its 100% your loss. Same for health care, everyone should have the option of purchasing into a private or public insurance plan. BUT if you elect to save your pennies and don't purchase in, and you get sick, you are responsible for 100% of the cost up front or else the hospital can refuse treatment. Alternatively, the hospital will treat you but if you can't pay 100% of the cost, its off to debtors prison for you where you work off the debt.
Lastly, if there is an 'uninsurable (read unforseeable) event' like an asteroid slams into a US city, the federal and state govt's should offer disaster relief and help rebuild those areas provided that it's not likely that another asteroid is headed for that same city anytime soon.
I'm very curious what the end result of this policy change is.
I see two possabillitys:
1. rich people will gobble up the land continue to build expensive homes and just accept the cost of insurance or rebuilding every 15 years.
2. Average people build more modest homes that are cheaper to insure and rebuild.