The National Flood Insurance Program has been reauthorized on a patchwork of short-term extensions for years, most recently pushed only to September 30, 2026, and Congress has never delivered the structural fix — a real private-capital-backed catastrophe layer — that actuaries have wanted since Katrina. Meanwhile California's FAIR Plan, the "insurer of last resort" that has ballooned from roughly 124,000 policies in 2019 to more than 645,000 by the end of 2025 as private carriers retreat from wildfire zones, just had to sponsor its first-ever catastrophe bond and lean harder on traditional reinsurance to stay solvent after paying out over a billion dollars in the January 2025 Palisades and Eaton fires. This is the mechanism: when federal risk-sharing legislation doesn't move and state residual-market pools keep absorbing policyholders that private insurers won't touch, someone still has to sit behind those pools for the tail risk. That someone is the global reinsurance market — and Berkshire Hathaway is one of its largest, best-capitalized players, pricing every renewal at hard-market rates because political inertia, not physics, is what keeps supply constrained.
Who cashes in: