California Regulations Prevent Insurers From Accurately Pricing Wildfire Risk, so Now They’re Fleeing the State

“Like a good neighbor, State Farm Insurance is warning Californians to stop living and building in high wildfire-risk zones. That is the upshot of a press release in which the insurer states that the company, as a “provider of homeowners insurance in California, will cease accepting new applications including all business and personal lines property and casualty insurance, effective May 27, 2023.” State Farm is taking this step largely because the California Department of Insurance’s system of price controls does not allow it and other insurance companies to charge premiums commensurate with the potential losses they face.

Consequently, State Farm is no longer willing to sell new homeowner insurance policies because the company calculates that it cannot cover potential losses in the face of increasing wildfire risks, fast-rising rebuilding costs, and steep increases in reinsurance rates. Higher rebuilding costs boost the values of the houses and businesses that companies currently insure.”

America needs to decide how much Covid-19 risk it will tolerate

“Particularly with the rise of the delta variant, a consensus has formed that the coronavirus likely can’t be eliminated. Like the flu, a rapidly shapeshifting coronavirus will continue to stick around in some version for years to come, with new variants leading to new spikes in infections. Especially as it becomes unlikely that 100 percent of the population will get vaccinated, and as it becomes clear that the vaccines provide great but not perfect protection, the virus is probably always going to be with us in some form, both in America and abroad.

That doesn’t mean the US has to accept hundreds of thousands of deaths annually in the coming years. While the vaccines have struggled at least somewhat in preventing any kind of infection (including asymptomatic infection), they have held up in preventing severe illness, hospitalization, and death — reducing the risk of each by roughly 90 percent, compared to no vaccine. Research has also found stricter restrictions reduce Covid-19 spread and death, and that masks work.

But it’s also become clear most Americans aren’t willing to tolerate drastic deviations from the pre-pandemic normal — lockdowns, staying at home, and broadly avoiding interactions with other people — for long. While social distancing staved off the virus in the pre-vaccine pandemic days, it also wrought economic, educational, and social devastation around the world. It’s the intervention that, above all, most people want to avoid going forward.”

“the balance, as the coronavirus becomes endemic, will require accepting some level of Covid-19 risk — both to individuals and to society. America already does that with the flu: In some years, a flu season kills as many as 60,000 people in the US, most of whom are elderly and/or people with preexisting health conditions, but also some kids and previously healthy individuals. As a cause of death, the flu can surpass gun violence or car crashes, but it’s a tolerated cost to continuing life as normal.”

“With about half the country vaccinated, the Covid-19 death rate is still much higher than that of the flu — the more than 120,000 deaths over the past six months is still more than double the number of people even the worst flu seasons have recently killed. But as more people get vaccinated and others develop natural immunity after an infection, the death rate will likely come down.”

“How many deaths are Americans willing to tolerate?”

“Are 30,000 to 40,000 deaths a year too many? That’s generally what the country sees with gun violence and car crashes — and American policymakers, at least, haven’t been driven to major actions on these fronts.

Are as many as 60,000 deaths a year too many? That’s what Americans have tolerated for the flu.

Are 90,000 deaths a year too many? That’s the death toll of the ongoing drug overdose crisis — and while policymakers have taken some steps to combat that, experts argue the actions so far have fallen short, and the issue doesn’t draw that much national attention.

Is the current death toll — of more than 1,500 a day, or equivalent to more than 500,000 deaths a year — too much? Many people would say, of course, it is. But in the middle of a delta variant surge, Americans may be revealing their preferences as restaurant reservations are now around the pre-pandemic normal — a sign the country is moving on. “The loudest voices on social media and in public are way more cautious than the average American,” Jha said.”

The president’s job is to manage risk. But Trump is the risk.

“the novel coronavirus came, and President Trump did nothing for week after week, month after month. We sit, still, in the void where a plan should be, forced to choose between endless lockdown and reckless reopening because the federal government has not charted a middle path. Instead, we wake to presidential tweets demanding the “liberation” of states, and laugh to keep from crying when the most powerful man in the world suggests we study the injection of disinfectants. Trump has let disaster metastasize into calamity. The feared collision of global crisis and presidential recklessness has come, and it is not close to over.”

“much of any presidency takes place in the murky realm of risk. Imagine that there are 10 horrible events that could befall the country in a president’s term, each with a 1 in 40 chance of happening. If a president acts in such a way that they all become much likelier — say, a 1 in 10 chance — he may never be blamed for it, because none of them may happen, or because the one that does falls during his successor’s term. But in taking calamity from reasonably unlikely to reasonably likely, he will have done the country terrible harm.
The logic works in reverse, too. A president who assiduously works to reduce risk may never be rewarded for their effort because the outcome will be a calamity that never occurred, a disaster we never felt. We punish only the most undeniable of failures and routinely miss the most profound successes.”

“Of late, I’ve been thinking back to 2017, when Trump began a war of tweets with North Korea, the world’s most irrational nuclear regime. “Just heard Foreign Minister of North Korea speak at U.N.,” Trump wrote. “If he echoes thoughts of Little Rocket Man, they won’t be around much longer!”
Trump’s behavior stunned even Republican allies. Sen. Bob Corker (R-TN), then the chair of the Foreign Relations Committee, warned that the president was treating his office like “a reality show” and setting the country “on the path to World War III.”

But World War III didn’t happen. Trump and Kim Jong Un deescalated. They met in person and sent each other what Trump later called “beautiful letters.” The fears of the moment dissolved. Those who warned of catastrophe were dismissed as alarmist. But were we alarmist? Or did Trump take the possibility of nuclear war from, say, 1 in 100 to 1 in 50?

Moments like this dot Trump’s presidency. His withdrawal from the Iran nuclear deal dissolved the only structure holding Iran back from the pursuit of nuclear weapons. What’s followed has been not just a rise in tensions but a rise in bloodshed, culminating with Trump’s decision to do what both President George W. Bush and President Barack Obama chose not to do and assassinate Iranian military leader Qassem Soleimani. The end of that story is as yet unwritten, but possibilities range from Trump’s gamble paying off to Iran triggering a nuclear arms race — and perhaps eventually nuclear war — in the Middle East.

Trump’s withdrawal from the Paris climate accord, alongside his routine dismissals of the NATO alliance, similarly force us to imagine the future probabilistically. In both cases, Trump says he is simply being a tough negotiator, forcing the better deals America deserves. In both cases, unimaginable calamity may — or may not — result. The verdict will not come by Election Day. We will have to judge the risks Trump has shunted onto future generations.

Of the many risks that Trump amplified through lack of preparation, reckless policymaking, or simple inattention, a pandemic is the one that came due while he was still president. But it is not the only one lurking, nor is it somehow a charm against other disasters befalling us. Moreover, the coronavirus itself raises the risk of geopolitical crises, of financial crises, of disasters both expected and unexpected, manifesting.

Trump, in his daily rhetoric and erratic mismanagement, is placing big, dangerous bets, but he will not cover the losses if they go wrong: It’s America, and perhaps the world, that will pay, in both lives and money.”

“Former New Jersey Gov. Chris Christie, who originally ran Trump’s transition team, relayed to Lewis a telling comment Trump made about the pre-administration planning, which he considered a waste of time. “Chris,” he said, “you and I are so smart that we can leave the victory party two hours early and do the transition ourselves.”

Each day, the president of the United States receives the President’s Daily Brief: a classified report prepared by US intelligence agencies warning of gathering threats around the globe. US intelligence agencies warned Trump of the dangers of the novel coronavirus in more than a dozen of these briefings in January and February. But Trump “routinely skips reading the PDB and has at times shown little patience for even the oral summary he takes two or three times per week,” reported the Post.

Two problems build amid this kind of executive impatience. First, the president is unaware of the nation’s constantly evolving risk structure. Second, the bureaucracy he, in theory, manages receives the constant message that the president doesn’t want to be bothered with bad news and does not value the parts of the government that produce it, nor the people who force him to face it.

It is, in fact, worse than that. “The way to keep your job is to out-loyal everyone else, which means you have to tolerate quackery,” Anthony Scaramucci, who served (very) briefly as White House head of communications, told the Financial Times. “You have to flatter him in public and flatter him in private. Above all, you must never make him feel ignorant.”

In March, speaking at the Centers for Disease Control and Prevention headquarters, Trump unintentionally revealed how much time his underlings spend praising him, and how fully he absorbs their compliments. “Every one of these doctors said, ‘How do you know so much about this?’” Trump boasted. “Maybe I have a natural ability. Maybe I should have done that instead of running for president.””

” “When the president stands on top of a table and says, ‘This is super important, super urgent, everyone must do this,’ the government works moderately effectively,” Ron Klain, who managed the Obama administration’s Ebola response, told me. “That’s the best case. When the president is standing up and saying, ‘I don’t want to hear about it, I don’t want to know about it, this doesn’t really exist,’ well, then you’re definitely not going to get effective work from the government.””

“we conflate the unlikely and the impossible. This pandemic, if nothing else, should shatter that conflation. It is hard to pretend the worst can’t happen when you haven’t been able to enter a store or see your parents for six weeks. And let’s be clear: coronavirus is not the worst that can happen. The H5N1 virus, for instance, has a mortality rate of 60 percent, and scientists have proven that it can mutate to become “as easily transmissible as the seasonal flu.”

Even scarier is the possibility of human-engineered pandemics. As bad as the coronavirus is, Bill Gates told me, “it’s not anywhere near bioterrorism — smallpox or another pathogen that was intentionally picked for a high fatality rate as well as delayed symptoms and a high infectious rate.”

We play for the highest of stakes. We must do what we can to improve our odds.”

“No one bears a heavier burden in that respect than the US president. But Trump is reckless with his charge. That reflects, perhaps, his own life experience. He has taken tremendous risks, and if they have led him to the edge of ignominy and bankruptcy, they have also led him to the presidency.

But he has always played with other people’s money and other people’s lives. “The president was probably in a position to make riskier decisions in life because he was fabulously rich from birth,” says Murphy. “But it’s also true he has had a reputation for risk not backed up by reality. His name is on properties he doesn’t own. We think of him as taking risk in professional life, but a lot of what he does is lend his name to buildings with risks taken by others. He’s built an image as a risk taker, but it’s not clear how much risk he’s taken.”

In electing him president, however, we have taken a tremendous risk, and it isn’t paying off.”