Willingness to Pay for Multi-Peril Hazard Insurance

Abstract

Increasing the number of insured assets in high risk areas can help reduce the need for federal disaster aid and help communities rebuild quicker following a disaster event. Offering a bundled multi-peril homeowners insurance product may be one way to do this. Using individual level survey data, we assess demand for a hypothetical multi-peril insurance product and estimate a mean annual willingness to pay of \$4396.93. Both quantitative and qualitative analysis point to cost being the primary concern for adoption, however, reducing cognitive burden and uncertainty in the claims filing process appear to be important factors that appeal to homeowners.

Keywords: natural hazards, flood insurance, multi-peril insurance

JEL Classification: Q54, G22