....“Faktor K,” for “Kultur”: the culture factor. Losses from Hurricanes Katrina, Rita, and Wilma had been much higher than expected in ways the existing windstorm models hadn’t predicted, and it wasn’t because they were far off on wind velocities.
The problem had to do more with how people on the Gulf Coast were assessing windstorm risk as a group. Mangrove swamps on the Louisiana coast had been cut down and used as fertilizer, stripping away a barrier that could have sapped the storm of some of its energy. Levees were underbuilt, not overbuilt. Reinsurers and modeling firms had focused on technology and the natural sciences; they were missing lessons from economists and social scientists. “We can’t just add another bell and whistle to the model,” says Bresch, “It’s about how societies tolerate risk.”
“We approach a lot of things as much as we can from the point of statistics and hard data,” says David Smith, head of model development for Eqecat, a natural hazards modeling firm. “It’s not the perfect expression.” The discrepancy between the loss his firm modeled for Katrina and the ultimate claims-based loss number for his clients was the largest Smith had seen. Like others in the industry, Eqecat had failed to anticipate the extent of levee failure. Construction quality in the Gulf states before Katrina was poorer than anticipated, and Eqecat was surprised by a surge in demand after the storm that inflated prices for labor and materials to rebuild. Smith recognizes that these are questions for sociologists and economists as well as engineers, and he consults with the softer sciences to get his models right. But his own market has its demands, too. “The more we can base the model on empirical data,” he says, “the more defendable it is.”
After their walk around the lake in 2005, Swiss Re’s Bresch and Schraft began meeting with social scientists and laying out two goals. First, they wanted to better understand the culture factor and, ultimately, the risks they were underwriting. Second, they wanted to use that understanding to help the insured prevent losses before they had to be paid for.
The business of insurers and reinsurers rests on balancing a risk between two extremes. If the risk isn’t probable enough, or the potential loss isn’t expensive enough, there’s no reason for anyone to buy insurance for it. If it’s too probable and the loss too expensive, the premium will be unaffordable. This is bad for both the insured and the insurer. So the insurance industry has an interest in what it calls “loss mitigation.” It encourages potential customers to keep their property from being destroyed in the first place. If Swiss Re is trying to affect the behavior of the property owners it underwrites, it’s sending a signal: Some behavior is so risky that it’s hard to price. Keep it up, and you’ll have no insurance and we’ll have no business. That’s bad for everyone.
Originally Posted by Enoch the Red
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Yep, temporary bans happen all the time, in parks or state forest campgrounds, also residential areas during drought. It is surprising if Texas hadn't put those precautions in place. Cain is being obnoxious again, that's all. 
