All‐Hazards Homeowners Insurance: Challenges and Opportunities

15 Pages Posted: 26 Mar 2018

See all articles by Howard Kunreuther

Howard Kunreuther

University of Pennsylvania - Operations, Information and Decisions Department; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: Spring 2018

Abstract

In the United States, standard homeowners insurance policies cover damages resulting from fire, wind, and hail, but exclude damages caused by floods and earthquakes. This is not the practice worldwide: several countries include all perils in homeowners insurance. Building on two fundamental insurance principles—that premiums reflect risk and that support for low‐income households come from public funding, not insurance premium subsidies—this article proposes a strategy for developing an all‐hazards homeowners insurance policy in the United States that should be attractive to both private insurers and property owners. It outlines critical supporting roles for the public sector and proposes modifications to the National Flood Insurance Program that could provide a foundation for all‐hazards insurance.

Suggested Citation

Kunreuther, Howard C., All‐Hazards Homeowners Insurance: Challenges and Opportunities (Spring 2018). Risk Management and Insurance Review, Vol. 21, Issue 1, pp. 141-155, 2018. Available at SSRN: https://ssrn.com/abstract=3149180 or http://dx.doi.org/10.1111/rmir.12091

Howard C. Kunreuther (Contact Author)

University of Pennsylvania - Operations, Information and Decisions Department ( email )

3730 Walnut Street
558 & 559 Jon M. Huntsman Hall
Philadelphia, PA 19104-5340
United States
212-854-0423 (Phone)
215-573-2130 (Fax)

National Bureau of Economic Research (NBER)

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