[goodsamaritan]

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Insurance and HOAs FTW

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Insurance does not solve the problem at all. When I purchased the house, there was to the best of everyone's knowledge a 0% chance of the river flooding, so insurance would have clearly been -EV. Once the flooding problem has been discovered, no insurance company would insure my house for less than 1 millions dollars. So we would still all be better off building the damn for $750,000 a piece. Not to mention the fact that we wouldn't have to go through the hassle of having our homes destroyed, then collecting a million dollar check.

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The only way there can be a 0% chance is if it's actually been proven that it's impossible, and that's certainly not possible. Either way, there's still a second option, not to mention options that haven't been thought of.

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I addressed HOAs briefly in an edit. Regardless, my main point was not to prove free rider problems are 100% insurmountable without coercion, but that Borodog's post was intellectually dishonest for just completely writing off the issue with one little anecdote.

And fine, let's say the probability of flooding was 10%. Insurance would still have been -EV at the time we would have purchased insurance, unless the insurance company had mistakenly based their rates on a lower probability.