[hanbura]

I am guaranteed to die at some point. Yet (at least in Germany) I can go to a private insurance company, agree to pay a few euros each month and in return they pay out 10000€ when I die to cover my funeral, no questions about cause of death asked. It's an insurance that is guaranteed to pay out, but it still insures against uncertainty because I don't know when I will die.

Flood insurance is fundamentally the same, the payouts are just not well spread, requiring a large geographically diverse insurance company.

[lotsofpulp]

In order for the insurance company to pay you 10,000 euros when you die, they have to collect that much from you plus their operating expenses minus the investment gains expected over your expected lifetime. This is whole life insurance, and it's usually a better idea to stick the money into index funds and avoid paying the insurance company for their operating expenses.

And we're not talking about a 10,000 euro loss here, when a home gets flooded, the loss is likely six figures or more since houses aren't cheap. Most people can't afford insurance for a likely loss of $100,000.

There are many large geographically diverse insurance companies, and there is a reason all of them stay away from flood insurance. There's no buyer for the amount of premium they would have to charge.