I link this thread to the "
Coastal Cities are a Hidden Time Bomb" thread in the sense that in both cases, things were built in such a way that insurance companies won't cover them.
A stick house on a beach is related to a low-reliability "truck" that cannot be economically repaired. Either construction represents a high probability of loss to an insurance company. Eventually that probability rises so high that it is uneconomical to cover the thing, as there is no path to profitability for an insurance company. If they throw out an appropriately high bid based on actuarial data, they simply won't get any business and will have wasted time on the quotes and actuarial legwork. It's more profitable to just walk away from these policies, because customers cannot afford them.
Insurance companies ate / subsidized losses for these sorts of properties for a long time, but the recent outbreak of inflation plus decimation of their bond portfolios in 2022 changed the calculus.
As with coastal real estate, the market solution is either for prices to fall or for us to start building things differently. Insurance costs may become the bulk of the property's / car's expenses, but unaffordability is not an option. The insurance companies cannot eat losses forever.