Risk Factors and Sharing Risk

I’ve been listening to the citizens of southern California pledging to rebuild their homes, again in the midst of fire and mudslide danger zones.

I’ve been thinking about the risks to my homes, and the potential risks come out like this:

thunderstorm
(wind and hail) 5%
sewer backup 1%
blizzard .05%
flood .01%
home fire .01%
tornado .001%
hurricane .001%
earthquake .0001%
wildfire .0001%

These are not scientific numbers but I think are a good reflection of my risk profile.

I understand that insurance involves sharing risks, and that some have higher risks and other have lower risks.

However……..

At some point I’m not certain I want to share risks with people who build expensive homes in fire zones or build expensive homes on exposed beaches in hurricane areas.

California has too many people in places where there are high risks and a shortage of water. This is a result of 30 years of non-existant public policies on sprawl and internal migration.

So who pays?