I have two concerns with that approach. One, the combined cost may not be reflected in the "sticker" price, and people may have some difficulty estimating a combined cost. I think this happens with cars, but may be mistaken. People look at the sticker price and maybe ignore the cost of insurance until they take it home? Maybe that's just a figment of my imagination, though.
My other concern is that insurers may not appropriately price in the cost of insuring a flood area. Of course, people will flock to the lowest price insurer. Then a 100- or 1000-year flood rolls around, like Harvey, and the insurer goes bankrupt and people still lose their homes and money. This can be mitigated by insuring the flood zone insurers, or something like that, but doesn't that still amount to flood zone regulation regulation?
Re: marking areas as "high risk" and not — obviously a binary distinction is a poor fit and some sort of gradient scale would be more appropriate.
Insurance isn't a single layer affair. Insurance companies have macro-insurance that covers the entire business in case they misjudged risk. It is legally required in (almost?) all insurance contracts to insure the company offering the insurance. Sometimes those meta-insurers are state agencies, sometimes they are private.
I have two concerns with that approach. One, the combined cost may not be reflected in the "sticker" price, and people may have some difficulty estimating a combined cost. I think this happens with cars, but may be mistaken. People look at the sticker price and maybe ignore the cost of insurance until they take it home? Maybe that's just a figment of my imagination, though.
My other concern is that insurers may not appropriately price in the cost of insuring a flood area. Of course, people will flock to the lowest price insurer. Then a 100- or 1000-year flood rolls around, like Harvey, and the insurer goes bankrupt and people still lose their homes and money. This can be mitigated by insuring the flood zone insurers, or something like that, but doesn't that still amount to flood zone regulation regulation?
Re: marking areas as "high risk" and not — obviously a binary distinction is a poor fit and some sort of gradient scale would be more appropriate.