Fires are still raging across Los Angeles in what is shaping up to be one of the most expensive calamities on American soil, with estimates of the economic damage and losses running as high as $275 billion.
Yet there are few signs that policymakers and regulators are grappling with the decisions that brought so many people into high-risk areas to begin with.
In theory, insurance prices quantify the risks of living in a certain place. Of course it should be more expensive to insure a home in an area buffeted by disaster.
The result is highly unfair and distorts the market. It endangers our economy by sending scarce resources into the path of natural disasters and will likely devastate still more lives.
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