Property insurance affordability crisis-- where does it end?

[dutch777]

I just read an article that mentioned that Suze Orman, the finance guru, stated that she has a 2100 square foot condo on the beach somewhere in Florida. Her latest quote for property insurance was like $24,000 a year. The article was not completely explicit but I assume this is just her interior walls and finishes and contents. The rest of that assumption is the the condo association also has property insurance on the common building components-- basic structure, exterior envelope including windows, roof and skin and the site. Ms. Orman noted she thought that number was crazy and given recent trends in FL, if she were to file a claim the insurer would likely deny it. Being in a financial condition to do so, she was choosing to self insure.

So the question is, given FL and CA and other areas where repetitive property risks exist are having more and more insurers flee the markets or raise rates astronomically, where does this logically go? Assuming more rich folks opt to self insure, the insurance payment pool shrinks. With reports that those on the other end of the income spectrum also are opting out at their own risk, the payment pools that make insurance work shrink even more. Given mortgage lenders require property insurance coverage for homes they lend on, makes some very desirable but risky locales only for the rich. Seems like this is going to end badly for many who will find themselves in property they cannot afford to protect with insurance but maybe also can't sell at original value because buyers will be aware of the insurance trap present. And communities after a disaster could be left with heavily damaged properties that the owner will simply walk away from as they cannot afford repairs.