And yes, basically we don't understand the actual probability of a "500-year storm", so our 0.2% chance per year is unreliable at best, more likely misleading.
Just like Europeans didn't know the actual probability of a black swan until they found them in Australia.
I think the idea of a black swan is something which you don't even imagine before you encounter it, ie: nobody would even think about computing the probability of a black swan (bird) existing.
While unimaginability may fit the original conception of a black swan, Taleb's book is "The Black Swan: The Impact of the Highly Improbable" (not unimaginable or inconceivable) and defines a black swan as "an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility." http://www.nytimes.com/2007/04/22/books/chapters/0422-1st-ta...
And yes, basically we don't understand the actual probability of a "500-year storm", so our 0.2% chance per year is unreliable at best, more likely misleading.
Just like Europeans didn't know the actual probability of a black swan until they found them in Australia.