Barry Brownstein writes: “If you have a history of drunk driving, that increases the chances you’ll make an insurance claim on your car — so your premiums will be higher, and that encourages you not to drive in the future (or to drive sober in the first place).
“If you bought a fancy sports car, that would increase the loss to the company if your vehicle gets damaged — so your premiums would be higher. That might encourage you to buy a less-expensive vehicle.
“If governments subsidized car-insurance policies the way they do with flood insurance, we’d see more drunks driving Ferraris around, at the expense of taxpayers.
“Getting the government out of the flood insurance business and having insurance companies determine actuarially sound premiums is the only way for homeowners, businesses, and builders to know the real risk they are assuming. If the risk is high, premiums will be prohibitive, and building will migrate to areas less prone to flooding.”[Learn Liberty]
