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Hi Friends,
Today, I want to tell you about the second problem with housing. As our early readers may recall, the second edition of Friday Finance was called “The Problem with Housing”. That article addressed the problem of how the prices of homes have been skyrocketing recently. They have become so expensive that they are unaffordable for many Americans. In the original version, I discussed possible governmental solutions to the housing crisis like creating a government agency, but today, I want to tell you how, why, and what more we can know about this problem and how it relates to the problem of climate change.
As climate change progresses and continues to gets worse, there is more global warming, more severe weather events, and more environmental damage. For people who have houses, cars, and a lot of other needs, they need insurance. The problem is that people are getting angry at insurance companies for increasing premiums and limiting coverage. While this is a problem for the customers who can not pay these premiums, it is an equal problem for those insurance companies.
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Climate change is a huge problem for insurance on both sides of the equation, and they are affected by the same problem. The climate change crisis is affecting businesses and consumers and if we don’t do something, it will affect every single one of us.
These companies are raising premiums because climate change has caused huge increases in flooding, fires, and more natural disasters. This makes these insurance companies increase premiums because they need to stay in business. Even with these higher premiums, these companies are not making progress because they are not making a profit which means they will raise prices again.
The reason the insurance companies are not making a profit is that as climate change gets worse, there is more widespread service that needs to be provided, and insurance companies are having trouble meeting those. This is due to the way that insurance companies make a profit. They make a profit by providing extra money for risk and charging a monthly fee for that. But, if there are too many emergencies, the insurance company doesn’t make a profit.
To make a profit, they can only provide coverage to clients that they trust are not going to need the emergency fund all the time. If climate change keeps getting worse, they will cut coverage, increase premiums, or go out of business.
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If the insurance companies decide to cut coverage, their contracts will be limited in terms of what they cover. As climate change gets worse, fewer and fewer people will get coverage by insurance. This could cause a lot of negative effects on the economy.
If the insurance companies decide to increase premiums and other out-of-pocket costs to customers, a lot of the customers will stop using insurance entirely, and a lot of insurance companies will be urging them to sell. Insurance would become a luxury for only the rich and only provided by the little insurance companies left. Then, a lot of people would experience disasters like losing their homes or other belongings and not getting reimbursed due to no coverage.
If insurance companies went out of business, they would also leave, and almost no one would have insurance, only the rich. As I’ve demonstrated above, the effects of climate change are not limited to people and the environment but also to businesses. These insurance companies would most likely cause negative effects on society.
I want to take a moment to discuss something very important to me and a lot of other people. Climate Change is a real problem and it needs to be fixed. I know most of my subscribers know this, but we have to press on. Tell the world we have to do something. We need a systemic solution. Just try to do the smallest possible thing to help climate change. Use better lights, do cold wash, pick up trash, etc.
Anyway, thank you so much to my readers and subscribers for their help and support. I want to tell you that if you have any thoughts, ideas, suggestions, or anything else you want to talk to the creators of Friday Finance about just email: [email protected]. This is the first sequel we have done for our articles. If you would like to browse our full collection of articles go to: fridayfinancedc.beehiiv.com. Anyway, have a great week, and see you next week.
Jacob Gans
Friday Finance