Insurability as a Siting Constraint
Faraday's read: the industry learned to site for power, then learned to site for water. Insurability is the third constraint arriving on the same logic. The load-bearing variable is exposure, and exposure is fixed at siting — you can improve protection forever but you cannot relocate a finished building off a flood plain or out of a wildfire corridor. As catastrophe losses rise and capacity tightens, the insurer's willingness to stand behind a location becomes a gate on whether it should be built there at all.
Knowledge check
Why is insurability best understood as a siting constraint rather than a procurement decision, and what makes it analogous to power and water?
Show the answer
Because the dominant driver of insurability — catastrophe exposure — is fixed the moment the site is chosen and cannot be improved after construction, so insurance cost and availability are effectively determined at siting, exactly as power and water availability are; like them, insurability can render an otherwise attractive site uneconomic or unbuildable, making it a gating input to site selection rather than a line item bought afterward.