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Welcome to money for the rest of us. This is a personal finance show on money, how it works,

how to invest it, and how to live without worrying about it. I'm your host, David Stein.

Today is episode 508. It's titled, Who Should Bear the Cost? Socialized versus Market-Based

Risk Management. As I record this on January 21st, 2025, there are still wildfires burning

in California. The Palisades fire has burned almost 24,000 acres. It's only 63% contained.

They eaten fire at 14,000 acres, 89% contained, and there's some other smaller wildfires that have

started that have less than 10% containment. 27 people have died in these fires.

Over 12,000 structures destroyed or damaged. J.P. Morgan estimates that these fires around Los Angeles

have close to $50 billion in losses, of which only $20 billion are insured.

60% of the losses are uninsured. I can't imagine having that type of exposure.

Obviously, some people are wealthy enough to self-insure, maybe some businesses,

but I suspect many individual homeowners are underinsured,

which will make rebuilding especially challenging.

Munich Re in 2024 estimates that natural disasters caused losses of $320 billion,

56% of which were uninsured. That is the fifth most costly year since 1980.

...