Does the Coastal Barrier Resources Act Provide a Policy Template to Address Wildfire Risk?

The CBRA prohibits federal financial assistance related to new development in designated coastal barrier areas, forcing private actors to bear the full costs of development. Could a similar approach be used to address escalating wildfire costs? Could Congress designate a “High Wildfire Hazard Resources System” to eliminate federal incentives to develop those lands?Read More

Moving the Needle on Closing the Flood Insurance Gap

In October 2018, the Wharton Risk Center’s Policy Incubator hosted a workshop designed to evaluate policy options for expanding the number of people with flood insurance in the United States. In our most recent issue brief, we present seven approaches that workshop participants felt had the potential to generate substantial increases in take-up rates across the country.Read More

Oregon Improves Agent Knowledge of Flood Insurance

For many people, their insurance agent is the person they turn to for advice on flood insurance. But many insurance agents do not understand flood insurance either. Last month, Oregon became the fifth state in the country to try and improve insurance agent understanding about flood insurance by creating a flood-specific continuing education requirement. 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

Federal Disaster Rebuilding Spending: A Look at the Numbers

Last year set records for natural disaster damages in the United States.  NOAA estimates total damages from the 2017 events were over $300 billion.  The U.S. experienced not one, not two, but three land falling hurricanes.  Hurricane Harvey set a record for rainfall.  The wildfires in California were some of the costliest the state has ever seen.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

Legacy of Harvey and Irma Turns on FEMA’s Post-Disaster Response

Hurricane Harvey destroyed vital roads, public infrastructure, and hundreds of thousands of homes across Houston and southeast Texas. In Florida, Hurricane Irma has left communities reeling with widespread blackouts, severe coastal flooding, and crippled telecommunications systems. When floodwaters finally recede and the debris is cleared, recovery will be long. The Federal Emergency Management Agency (FEMA) will be in these areas for years. And costs will reach well into the billions.Read More

Flooding and the Economics of Risk Reduction

As the long process of recovery begins for a devastated Texas, it is time to start thinking about how rebuilding can increase the resilience of the flooded households and communities. Incorporating risk reduction measures into rebuilding can often be more cost-effective when done as part of the repair process, and it also provides an opportunity to improve how flood risks are managed.Read More