Ron Paul, the Hamilcar of Presidential Candidates

[DGuller]

I'm not saying that you should evacuate, I'm saying that you should pay for the costs of living in a higher risk area rather than be subsidized by the entire country for it.  That's how economics work.  Sometimes it can't be done by insurance, agreed, but tornado risk has been successfully covered by private insurance for many decades.  It's not exactly like nuclear accident insurance.

I'm not sure you understand how tornadoes work.  Yes, areas like the Ohio Valley are 'higher risk' than say New Jersey because tornadoes are an annual event in the Ohio Valley as opposed to a once-a-decade or less thing in New Jersey.  Even so, a typical tornado doesn't do much damage and doesn't kill anyone.  Even 'monster' tornadoes like the one in Henryville, which did do damage and did kill people, killed maybe a dozen people in a county where 110,000 people live and destroyed maybe three dozen houses out of (I would guess) 40,000 or so.  The media likes to use phrases like "the town is gone" and "the whole town is leveled" but that most certainly did not happen in Henryville, IN, which I know firsthand because as mentioned elsewhere I have a friend who videotaped the tornado and appeared on CNN.  Yet, I keep hearing the term bandied about (even in local media) because I imagine it keeps people glued to the TV.

So I guess what I'd argue is that it's kind of disingenuous to say any location in the United States is a "high risk area" for tornadoes because their path of damage, while possibly quite intense, is extremely narrow in focus.  I don't think it's at all the kind of risk you can compare to say a major earthquake or a colossal hurricane, and should in no way be assessed as a penalty against someone in terms of insurance premium adjustments.  I would guess that no matter where you live in the United States, your chance of losing your house to a tornado is tiny compared to the risk of losing your house to a fire, which obviously could occur anywhere.

I don't think you understand how insurance works.  However tiny the chance of an individual house being destroyed by tornado, it's a lot less tiny in Oklahoma than it is in Rhode Island.  Therefore, all else being equal, insurance rates in Oklahoma should be higher than insurance rates in Rhode Island, to reflect the greater possibility of a house being destroyed by tornado.  Higher premiums are not "penalties", they're just a reflection of the higher risk and the higher cost of insuring houses. 

And, speaking of cost to insure against tornadoes, you're mistaken regarding the chance of losing your house to tornado as opposed to fire.  In some of the more tornado-prone states, the loss cost of covering tornado damages is about equal to the loss cost of covering fire damages.  Thankfully for insurers, and highly unfortunately for the people, tornados are frequent enough that they can actually be priced fairly accurately based on just experience.

[jimmy olsen]

Because major disasters don't happen too often, so there is not enough data.  Because we still can't predict the occurance of earthquakes.  Because if it works, commercial insurance companies would have done it.

Why do you think there is enough data?

Mono, those estimations are not only possible, but already done. That's how regulators decide, for example, how big an earthquake a new nuclear power station or dam has to be able to withstand.

And Fukushima must be a shining example of the accuracy of those estimations, I assume?

It did survive the earthquake.