tag:blogger.com,1999:blog-4159906646513306121.post1084388887825050662..comments2023-11-19T20:38:50.237-08:00Comments on Economic Logic: Hurricane insurance needs to be government runEconomic Logicianhttp://www.blogger.com/profile/10171296292101248614noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-4159906646513306121.post-89083755049519292302009-09-25T17:37:40.366-07:002009-09-25T17:37:40.366-07:00I would guess that the implied answer to your ques...I would guess that the implied answer to your question about private companies is that the risk in general is not fully priced into the government policy, and that on a practical basis the political tendency regarding differential risk based on location on government-sponsored insurance is that very high rates on at-risk property would meet more organized resistance than more moderately higher premiums across the board, which would imply inlanders would subsidize coastal folks. For the first, it wold be useful to compare time-weights on insurance payouts for elected officials and insurance boards.TStockmannhttps://www.blogger.com/profile/14429662359024503711noreply@blogger.comtag:blogger.com,1999:blog-4159906646513306121.post-44983071956363252172009-09-25T16:11:15.483-07:002009-09-25T16:11:15.483-07:00But not if this risk is priced in the policy, whic...But not if this risk is priced in the policy, which is easy to do as it is clearly observable.Economic Logicianhttps://www.blogger.com/profile/10171296292101248614noreply@blogger.comtag:blogger.com,1999:blog-4159906646513306121.post-41573665320307294242009-09-25T15:07:24.085-07:002009-09-25T15:07:24.085-07:00But I do not see where there could be moral hazard...<i>But I do not see where there could be moral hazard in the case of hurricane insurance, as policy holders cannot influence the path of a hurricane. </i><br /><br />Arguably building on or adjacent to Florida beachfronts, or in very low level areas such as the Ninth Ward of New Orleans, or in the Outer Banks or Florida Keys, involves moral hazard if the insurance rates are subsidized by policy holders or taxpayers in lower risk areas.TStockmannhttps://www.blogger.com/profile/14429662359024503711noreply@blogger.com