As Insurance Rises, An Underlying Problem Isn’t Addressed

Right now insurance is a window into the public psyche. As the values and prices of homes and cars go up, as well as the cost of replacement, insurance rates follow. Often harshly. This leads us to look for solutions and new ideas for reducing cost burdens because we don’t really want to talk about the actual problem.

An item in Washington Monthly profiling San Francisco’s Jane Kim discusses her run for state insurance commissioner with a bold idea, public disaster insurance inspired by New Zealand’s natural hazards cover program. Private insurers would still provide most coverage, but a disaster layer would be added on top above the median California home value.

But if those extra payments might not be enough to cover the cost of a disaster, that idea could open up the state, and taxpayers, to great financial risk, which impacts other interests in the long run such as bond funding for housing or transportation investments.

There’s a lot of interesting ideas and thoughts in the article so I do suggest reading the it, but the real discussion that we need to have begins at the bottom of the page with a passing glance. Avoidance. Addressing climate change and our built environment.

No one really wants to talk about what it would take to make insurance or housing or transportation affordable because it would require tradeoffs and tough choices. And the way things are going we’ll keep coming up with new ideas that aren’t fixing the original problem and might actually compound them as we add more layers of bureaucracy and regulation.

I realize if you’re reading this I’m probably telling you things you may already think and know. But we can’t keep expecting the emergency room to cure us when the work on our health should have started years before. The best time to start is now, so for the insurance problem, let’s look at the systemic issue of how we’ve laid out how we live and start from there.

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