The 3 Maps That Explain Residential Flood Insurance Purchases

While take-up rates in many parts of the country remain low for flood insurance, there are places where many households are insured and, surprisingly, places where most flood insurance is purchased outside of the FEMA-mapped high-risk areas. We offer three findings about residential NFIP purchases as demonstrated in three maps.Read More

Policy Incubator Receives Julio Castelo Matrán International Insurance Award

On June 14th, The Wharton Risk Center’s Policy Incubator received the Julio Castelo Matrán International Insurance Award from Fundación MAPFRE, a Madrid-based non-profit foundation committed to human well-being and social progress. Presented biennially, the €30,000 award recognizes projects that foster economic stability and solidarity through insurance and/or social protection.Read More

Reauthorizing the National Flood Insurance Program

In undertaking the reauthorization of the NFIP, Congress should bear in mind two guiding principles for insurance.  In addition, with increased knowledge of consumer behavior, a behavioral risk audit provides strategies that will nudge and incentivize individuals to make decisions that will ultimately reduce their future flood-related losses.Read More

Revised Risk Assessments

2017 proved to be one of the costliest disaster years on record.  Total damages in the US for the year are estimated to exceed $300 billion.  Insured losses for all natural disasters in 2017 will total around $135 billion.

Do events like these cause (re)insurers to update their risk assessments?  How do firms, consumers, and government respond to a perceived change in risk?  Carolyn Kousky examines these questions in a book chapter titled “Revised Risk Assessments and the Insurance Industry” in the recently released Policy Shock, edited by Edward J. Balleisen, Lori S. Bennear, Kimberly D. Krawiec, and Jonathan B. Wiener.  The chapter limits its attention to disaster insurance.Read More

Look to Caribbean risk insurance model for US hurricane recovery

The first few days after a disaster, such as we have recently experienced with Hurricanes Harvey and Irma, are about emergency response: making sure people are safe, reuniting families, securing housing, filling necessities and restoring lifelines. But as days shift to weeks and then months and years, the slow process of rebuilding is undertaken. At every step of the way is the question of financing. Are there dollars available for what needs to be done? Who will pay for it? How will the costs be shared?Read More

The Challenges of Disaster Insurance

As Texas begins the long process of recovery from Hurricane Harvey, and Florida braces for a possible hit from Hurricane Irma, too few victims will have the financial support of insurance payouts. Insurance should be a critical component of disaster recovery. Federal disaster aid grants are surprisingly limited, often not more than a few thousand dollars, and it often takes months or years to get into the hands of victims. Small Business Administration loans can be obtained to help finance recovery (for households, as well as businesses), but for fast money for rebuilding, there is no substitute for insurance.Read More