A
Access to insurance, 6.
See also Supply of coverage;
Insurance
Acquisition of land and properties, 143, 152-153
Act of God bonds, 223, 227, 253
Admitted insurers, 176, 186-189
Adoption of hazard mitigation measures
perceptions of risk and, 64-65, 68
underwriting and, 84
Adverse selection, 34-36, 38, 39, 40, 196, 204
Advisory loss costs, 180-181
Agents, 23
Alien insurers, 183, 189-190, 195
Alternative risk-financing mechanisms, 44, 46-49, 190, 253
A. M. Best and Company, 102, 106, 194
Ambiguity of risk, and premiums, 33-34, 38
American Property and Casualty Company, 108
Applied Insurance Research, 102, 123
Applied Technology Council, 85
ATC-13 study, 85
Auditing and inspecting property, 217-218
Automobile insurance, 22, 71, 179
Availability of insurance, 169.
See also Supply of coverage
B
Barrier islands, 146-147
Beach and wind plans, 48-49
Boston Manufacturers, 21
Bottomry, 18
Brokers, 23
Buffet, Warren, 75
Building Code Effectiveness Grading Schedule, 136, 138, 166, 220
Building codes
adoption of, 77-78
compliance/enforcement issues, 4, 10, 102, 166
and externalities, 220-221
fire-related, 157-158
hurricane-related, 7, 102, 123
insurance against changes in, 23
insurer involvement in, 164-165, 168
plan review standards, 166
prescriptive, 165
public education on, 166
questions, 221
retrofitting, 90, 166, 167, 201
and risk perception, 68, 218-220
seismic, 7, 56, 67, 68, 77-78, 90, 219
two-tiered, 165-166
uniform, 158-159, 168-169, 234
voluntary minimum standard, 165
Business interruption policy, 39, 70, 105
C
California
adoption of mitigation measures, 77-78
insurance regulation, 183
National Flood Insurance Program participation, 141
Office of Emergency Services, 246
California Earthquake Authority
assessments on insurers, 79
damage estimation, 84-85
deductible, 77
demand for insurance, 56-57, 66, 77
mandatory offer law and, 74-75, 78, 91-92
participation in, 76-77-79
private insurance market and, 5, 78-81
California earthquake insurance protection.
See also Earthquake insurance;
Earthquakes
Alquist-Priolo Special Studies Zones Act, 57, 218
antiredlining legislation and, 57
Assembly Bill13, 75
demand for coverage, 56-65, 81, 82, 87, 210, 211-212
federal role, 93-94
insurability issues, 90-92
Insurance Department role, 26, 68, 71, 75, 77, 81, 85, 86-87, 88, 94, 246
marketing private insurance, 87-92
premium income, 79-80
probability of earthquakes and, 86
probable maximum loss, 87, 88-89, 94
reinsurance, 93-94
Seismic Safety Commission, 64-65
state government initiatives, 71-78
supply of coverage, 79-81
underwriting risks, 84
California Insurance Department
concern with probable maximum loss, 88, 94
Earthquake Questionnaire, 26
earthquakes, regulatory authority, 86-87
earthquakes, reporting requirements, 68
role with California Earthquake Authority, 77
studies on damage ratios, 85
surveys, 26, 71, 75, 81, 87, 246
Call spreads, 223
Capacity of insurer, 26-27, 89, 94, 120, 189, 195, 203, 204
Capital markets, 7, 75, 113, 122, 223, 227
Casualty insurance, defined, 22
Catastrophe insurance futures contracts, 223
Catastrophe losses
alternative financing methods, 44, 46-49
annual trends, 45-46
Catastrophe Risk Exchange, 223
Central U.S. Earthquake Consortium, 10
Chicago Board of Trade, 223, 253
Claims
adjustment, 201-202
defined, 24
expected payments, 180
handling, 70-71
modeling, 31
Coastal Barrier Resources Act, 146
Coastal Barrier Resources System, 146-147
Coastal development
and commercial growth, 6
and insurance exposure trends, 100-102, 103
erosion, 144-146
setbacks, 146
Coastal Resources Commission, 145
Code of Hammurabi, 18
Commercial property insurance
basic concepts, 230-231
brokers, 23
classification of structures, 233-235
coverage, 230
data availability, 236-237
earthquake coverage, 39, 66, 68, 69
exclusions, 230
hurricane coverage, 102, 104, 105
location, 236
multiperil, 23
occupancy, 235
small businesses, 237-238
underwriting, 233-236
value of insured exposures, 41, 68, 102, 104, 118, 231-233
Community Rating System, 135-138, 144
Construction.
See also Building codes
industry role, 9
Correlated risk, 37-38, 39, 40
Cost-benefit analysis, 52-53
Costs of natural disasters, trends, 1-2
Coverage.
See also Demand for coverage;
Residential coverage;
Supply of coverage
commercial property, 230
for deductibles, 73-74
earthquake insurance, 8-9, 39, 58, 66, 68, 70, 71, 73-74
exclusions in, 24, 84, 90, 114, 230
extended, 21-22
fire insurance, 39, 48, 58, 68, 71
flood insurance, 41, 55, 56, 99, 143-144, 145, 146-147
homeowners' policies, 39-44
hurricane/windstorm insurance, 5, 40-41, 48, 49, 97, 102, 104, 105 , 114-115, 118, 210
landslides, 41
loss of use, 70
multiple, 112-113
replacement, 91
restrictions, 196-197
second event, 118
windstorm, 21
Credit Suisse First Boston, 223
D
Damage.
See also Losses
fault characteristics and, 85-86
ratios, 84-85
relativity between factors, 85
Damageability
Deductibles
coverage for, 73-74
decreases, 169
and demand for coverage, 62-63
earthquake insurance, 61, 71, 73-74, 76, 77, 81, 84, 90
moral hazard and, 36-37
probable maximum loss and, 88-89
purpose, 26
windstorm insurance, 196
Demand for coverage
cultural contexts for, 53-54, 63-64
current, 210-212
deductibles and, 62-63
disaster experience and, 58-59
earthquake insurance, 53, 56-66, 77, 81, 82, 87, 210, 211-212
empirical evicence, 54-64
factors influencing decision making, 52-54, 66, 159, 209-212
flood insurance, 54-56, 147-150, 210
hazard disclosure legislation and, 57-58
hurricane insurance, 114, 117, 120, 210
information on hazards and, 53, 94-95
insurability conditions and, 38-39
purchaser characteristics, 63
reasons for purchase, 60-62
regulation and, 172
reinsurance, 120
risk perceptions and, 54, 56, 60-61, 63, 64, 66
survey research, 52, 60, 63-65
Direct writers, 23
Disaster assistance, federal
for earthquakes, 69
for floods, 54, 126, 149, 151-153
public facility repairs, 10, 228
restrictions on, 185
Disaster policy.
See also Disaster assistance, federal;
Mitigation, natural hazard
coordination of, 11-12
current, 10-11
financing recovery, 11-12
frequency of disasters and, 9-13
Disasters. See Natural disasters
E
Earthquake insurance.
See also California Earthquake Authority;
California earthquake insurance protection
business interruption policy, 39
damage estimates, 28-30
demand determinants, 13, 53-54
disclosure legislation, 57-58
earthquake experience and, 58-59
with homeowner's policy, 22, 39
mandatory, 90-92
maximum credible probability, 30
mortgages and, 56
probable maximum loss, 26, 30, 87, 90
profitability, 39
on public buildings, 10
rating process, 83-84
research studies, 93
typical policy, 70
Earthquakes
and building codes, 56
Cape Mendocino (1992), 59
characteristics, 32
Coalinga (1983), 59
fatalities, 59
fires related to, 39
hazard risk maps, 30, 58, 84, 216
Landers/Big Bear, 59, 60, 73, 86
Loma Prieta (1989), 13, 59, 60, 70, 73, 78, 91, 226
Long Beach (1933), 67
mitigation measures, 64-65, 84, 159
New Madrid, Missouri, 56
Northridge (1994), 1, 4, 10, 13, 24, 30, 31, 39, 50, 59, 65, 69-71, 72, 73, 76, 77, 80, 81, 85, 89, 94, 158, 210, 213, 214, 246
post-event investigations, 30
recurrence interval, 86
San Fernando (1971), 57, 67-68, 69, 87
San Francisco (1906), 67
Santa Barbara (1925), 67
scientific data, 28-30
Whittier Narrows (1987), 10, 59
Economic losses
floods, 102
property damage, 22
Efficiency, economic, 3, 13, 184, 202
EQECAT, 123
EQE International, 254
Equity, distribution of resources, 3, 13, 184-185, 199
Erosion hazards, 144-146
Exceedance probabilities, 84, 89
Excess-of-loss contracts, 26, 46-47, 75-76, 224
Expected insured loss, 87
Expected utility theory, 51, 52, 53
Exposure
hurricane insurance, 100-102, 103, 118, 119
values, 41, 68, 102, 104, 118, 231-233
Extended Coverage, 21-22
F
Fair Access to Insurance Requirements, 48
Federal Emergency Management Agency
earthquake insurance study, 159-160, 246
expenditures, 4
Individual and Family Grant program, 152
National Mitigation Strategy, 9, 155
NFIP administration, 128
role, 7
Federal Flood Insurance Act of 1956, 126
Federal Insurance Administration, 55, 128, 135, 139, 144, 161, 162 , 169
Federal natural hazards insurance program
advantages, 92
disadvantages, 92-93
hazard mitigation proposals, 160, 161-162, 164-165
Financial institutions
enforcement of National Flood Insurance Program requirements, 12
fire insurance requirement, 22
flood insurance study, 55-56
Financial regulation
capital requirements, 191-192
disaster-related derivatives, 193
guaranty funds, 189, 191, 195-196, 223
insurance regulation and, 191-196
investments, 192-193
reserves, 192, 194-195, 202, 203
risk assessment and, 194
risk-based capital requirements, 192
and supply of insurance, 193-194
Financing
capital market role, 223
National Flood Insurance Program, 138-140
recovery from disasters, 11-12
Fire insurance
building codes and, 157-158
community grading for, 136, 137-138
on mortgaged property, 22
riots and, 48
smoke damage, 21
Fires.
See also Wildfires
Chicago fire (1871), 20
earthquake-related, 39, 68, 71
historical data, 28
law of large numbers and, 24
lightning-related, 42
London (1666), 19
losses, 24
New York (1835), 20
risk identification, 28
Flood insurance, private.
See also National Flood Insurance Program
commercial, 126
future role, 153-154
grading systems, 137-138
National Flood Insurance Program and, 126, 134-135, 153-154
Write-Your-Own Program, 135, 153
Flood Insurance Producers National Committee, 135
Flood Insurance Rate Map, 55, 128, 130, 132, 136, 146, 147
Flood Insurance Rate Study, 130
Floodplain management
land use regulations, 125
local community role, 131
Floods
100-year flood standard, 130
hurricane-related, 26, 41, 99, 129, 130
losses from, 54
Midwest (1993), 10, 132, 150-151
preparedness for, 137
Florida.
See also Hurricances and tropical storms
National Flood Insurance Program participation, 141
population distribution, 100-101, 105
tornadoes, 42
vulnerability to hurricanes, 98-104, 122
Florida hurricane insurance protection.
See also Windstorm insurance
assessments on insurers, 107, 108, 111, 112, 113, 115, 116-117, 119
claims adjustment, 201
Commission on Hurricane Loss Projection Methodology, 123, 198, 240
demand for coverage, 114, 117, 120
Department of Insurance, 104-105, 106, 107, 109, 110, 116, 118, 119
exit restrictions, 109-111, 187, 188-189, 200-201
exposure trends, 5, 100-102, 103, 118, 119
Hurricane Catastrophe Fund, 111-113, 115
importance, 97
industry concerns, 5
Insurance Council, 123
Legislative Working Group on Residual Property Insurance Markets, 117-118
market effects of Andrew, 104-108, 202
new initiatives, 122-123
probable maximum loss, 116
Property and Casualty Joint Underwriting Authority, 13, 106-108, 114
rates and rate setting, 106, 109, 114-115, 116, 117, 120, 123
regulatory response, 109
reinsurance, 106, 110, 118, 120-122
Residential Property and Casualty Joint Underwriting Association, 113-118
residual market mechanisms, 111, 113-120
special purpose homeowners' insurance companies, 114-115, 116, 118
Study Commission on Property Insurance and Reinsurance, 110
supply of coverage, 108
Windstorm Underwriting Association, 113, 114, 115, 118-120
Florida Insurance Guaranty Fund, 107-108, 109, 115
Futures contracts, 223
G
Gambler's fallacy, 52-53
General Accounting Office, 146, 161
Geographic information systems, 30
Geographic risk diversification, 47, 90, 189-190, 196
German Pharmaceutical Pool, 224
Grand Forks, North Dakota, 152
Gray, William M., 99
H
Hazard insurance.
See also specific types of insurance
advantages, 2
history, 18-23
role in hazard management, 2-3, 4
Hazard management programs. See Mitigation, natural hazard
Hazard risk maps
coastal flooding, 146
Community Rating System creditable activities, 136
floodplain, 55, 128, 130, 132, 147
landslides, 30
revisions, 147
Homeowner's Guide to Earthquake Safety, 64
Homeowners' insurance, 8
coverage, 39-44
multiperil line, 71
prior approval regulations, 197
special purpose, 114-115, 116, 118
H.R. 1856, 160-161
H.R. 2806, 160
H.R. 4480, 159-160
Hurricanes and tropical storms
Alberto (1994), 99
Alicia (1983), 100
Andrew (1992), 1, 4, 10, 13, 31, 39, 41, 50, 69, 97, 99, 100, 102, 109, 110, 111, 119, 120, 122, 138, 160, 178, 188, 192, 210, 213, 214
Bob (1991), 100
characteristics, 41
cyclical nature of, 98
Elena (1985), 100
El Niño Southern Oscillation and, 99
forecasts, 99
formation, 98
Frederic, 100
Gilbert (1988), 41
Gloria (1985), 100
Gordon (1994), 99
insurance, see Florida hurricane
insurance protection;
Windstorm insurance
prediction, 41
worst case, 102
I
Information and education programs
Community Rating System creditable activities, 136
and demand for insurance, 53, 57-58, 150
and mandatory insurance, 197
program objectives, 166-167, 168
from real estate sector, 9, 57-58
Information technology, 5, 216-217
Inland Marine policies, 126
Institute for Business and Home Safety, 135, 219-220
Insurability conditions
and demand for coverage, 38-39, 159
for earthquakes, 90-92
identification of risk, 27-32, 140, 213
and portfolio risk, 159
premium setting, 33-38, 159, 213
Insurance
basic concepts, 23-27
key role, 214-215
legislation, 159-162
and natural hazard mitigation, 155, 157-162, 164-165
''per risk," 89
primary companies, 7-8
rating systems, 135-138
web sites, 252
Insurance Institute for Property Loss Reduction, 219-220
See also Institute for Business and Home Safety
Insurance markets.
See also Supply of insurance
entry and exit of insurers, 109-111, 138, 184, 186-189, 200-201
public policy and, 12-13
regulation of, 176, 179-182, 184-185, 186-190, 202-203, 207
admitted insurers, 176, 186-189
advisory loss costs, 180-181
alternative risk-financing mechanisms, 190
claims adjustment, 201-202
constraints on, 182-184, 207, 214
coordination of government policies, 204-205, 206-207
and cost of insurance, 184-185
coverage restrictions, 196-197
and demand for insurance, 172
economic rationale, 171-172
entry and exit of insurers, 109-111, 138, 184, 186-189, 200-201
externalities between states, 185
financial regulation and, 191-196
functions, 176-182
government role, 173-174, 185, 204-206, 207
market, 176, 179-182, 184-185, 186-190, 202-203, 207
nonadmitted and alien insurers, 176-177, 183, 189-190, 195
policy forms, 196-197
principal-agent conflicts and, 177-178
prospective loss costs, 180
rates, 33, 109, 159, 173, 179, 180, 184, 185, 197-200, 206
research questions, 206
residual market mechanisms and, 202
solvency, 173, 176, 177-178, 183, 184, 185, 186, 191-192, 195, 196 , 197
state insurance commissioners, 173, 174-176, 177, 181-182
structure, 172-184
and supply of coverage, 172, 184-185, 189, 191, 202, 207
underwriting selection, 190, 200-201
Insurance Services Office, 136, 138, 196, 220, 233-235, 236
Interagency Floodplain Management Task Force, 131-132, 151-152
J
J. P. Morgan, 223
L
Land use regulations.
See also Mitigation, natural hazard
floodplain management, 125
importance, 6
role in hazard mitigation, 4, 11
Law and ordinance insurance, 23
Law of large numbers, 24-26
Life and health insurance companies, 22
Lightning, 42
Lloyd's Coffee House, 18
Lloyd's of London, 18, 154, 177
London insurance industry, 18
Loss control services, 23
Loss of use coverage, 70
Losses.
See also Economic losses;
Expected insured loss;
Probable maximum loss
accumulated, 156
catastrophes, 45-46
collateral, 10
correlated, 38
defined, 23-24
distribution, 38
estimation, 25-26, 30, 31, 32, 71, 83, 102, 104
flood, 54
index of, 122
limiting, 26
policyholder behavior and, 36-37
reinsurance market, 120
repetitive, 142-143
reporting of, 71
uncompensated, 69
Lubbock, Texas, 42
M
Mandatory programs
earthquake insurance, 74-75, 78, 90-92
federally related mortgages, 161
flood insurance, 140-142, 143, 151
regulation of insurance and, 196-197, 199, 204
Manton, Edward, 21
Manufacturers Mutual, 21
Marine insurance market, 18
Maximum credible probability, 30
McCarran-Ferguson Act, 9, 174, 180
McCool, Thomas, 161-162
Mega-catastrophe, 88, 90, 94, 102, 214
Mitigation, natural hazard.
See also Building codes;
Information and
education programs;
specific types of disasters
acquisition of land and properties, 143
auditing and inspecting property, 217-218
capitalized investments, 199
Community Rating System creditable activities, 137
conditional availability of insurance, 169
cultural contexts for, 53-54, 63-64 defined, 155
federal issues, 161-162, 164-165
incentive-based, 4, 10, 167, 169, 199, 205, 221-222
institutional capacity and, 163-164
insurance industry and, 140, 157-162, 164-165, 169, 215-225
integrated approach, 140, 168-169
legislative initiatives, 159-162
multihazard approach, 167
National Committee on Property Insurance building code symposia, 165-167
National Flood Insurance Program, 9, 130-132, 140, 142-146
National Mitigation Strategy, 9, 155
program elements, 216-225
regulatory approaches, 163-164
research needs, 225-228
risk assessment and, 216-217
subsidies and, 3
success determinants, 10, 15, 215-216
voluntary approaches, 162-163
Models/modeling of risks
applications, 197, 227, 243-244
catastrophe models, 31-32, 159, 198, 216-217
characterization, 241-243
evaluation and testing, 244-248
Florida Commission on Hurricane Loss Projection Methodology, 123, 198, 240
hazard risk, 241-248
simulation, 227-228
safety-first, 213
value maximization, 213
Moral hazard, 36-37, 38, 39, 161
Mortgages
geographic lending discrimination, 57
insurance conditions on, 8, 11, 12, 55, 56, 140-142, 149, 150, 161 , 248, 249
Multiline, multistate companies, 80
Multiperil policies, 9, 22, 23, 71, 114
Munich Reinsurance Company, 2
Mutual insurance companies, 18, 20, 21, 80, 173
N
National Association of Insurance Commissioners, 9, 176, 180, 183-184, 186, 192, 193, 198, 201
National Board of Fire Underwriters, 157-158
National Board of Underwriters, 20
National Committee on Property Insurance, 160, 165-167
National Conference of Insurance Legislators, 224
National Earthquake Hazard Reduction Program, 30
National Fire Protection Association, 20
National Flood Insurance Act of 1968, 127, 138
National Flood Insurance Fund, 138
National Flood Insurance Program
administration, 128
claims, 133
and Coastal Barrier Resources System, 146-147
Community Rating System, 135-138, 144
compliance/enforcement issues, 55, 131
coordination of policy decisions, 140
coverage, 41, 55, 56, 99, 143-144, 145, 146-147
demand for coverage, 141, 147-150, 210
Emergency Program, 128
enforcement of requirements, 12
and erosion problem, 144-146
essential elements, 126-127
and federal disaster assistance, 151-153
funding, 138-140
hazard mitigation requirements, 9, 55, 130-132, 140, 142-144, 151, 169
history of, 125
insurance operation, 140
integrated approach, 140
issues confronting, 140-154
lapse rate, 55
mandatory purchase, 140-142, 143, 162
mapping, 147
Mitigation Grant Program, 143, 146
operating losses, 138-139, 140
participation in, 129, 132, 147-150
and perceptions of risk, 130
policy fees, federal, 140, 143
private industry role, 126, 134-135, 138, 153-154
public knowledge of, 55
rate maps, 55, 128, 130, 132, 136, 146, 147
Regular Program, 128
repeatedly damaged structures and, 142-144
risk identification, 128-130, 140, 246
standard of risk, 130
structure of, 128-135
subsidies, 132, 134, 139, 142, 143, 150-151, 162
surcharges, 131
web site, 252
Write-Your-Own Program, 135, 153
National Flood Insurance Reform Act of 1994, 55, 127, 141-142, 143 -144, 146, 149-150, 153
National Flood Insurers Association, 134
National Mitigation Strategy, 9
National Oceanic and Atmospheric Administration, 246
Nationwide Insurance, 223
Natural Disaster Loss Reduction Committee, 165
Natural disaster syndrome, 6-7
Natural disasters.
See also specific types of disasters
as public problems, 156-157
stakeholders, 7-9
trends, 2
web sites, 254
Natural Hazards Research and Application Information Center, 131, 254
Nelson, Bill, 198
Nonadmitted insurers, 176-177, 183, 189-190, 195
O
Omnibus Reconciliation Act of 1990, 143
P
Philadelphia, fire prevention, 19-20
Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, 19, 20
Policyholders
behavior of, 36-37
defined, 23
Premiums
actual, 28
adverse selection and, 34-36, 38, 39
ambiguity of risk and, 33-34, 38
assessments on, 79, 107, 108, 112, 160-161, 224-225
correlated risk and, 37-38, 39
damage estimation and, 85
defined, 23
and demand for insurance, 66, 159
discounts, 2, 10, 135, 137, 167, 169, 199, 215
earthquake insurance, 9, 30, 39, 79-80
flood insurance, 138, 139, 140, 151
hurricane insurance, 115
income from, 79-80
inspections and audits and, 35
moral hazard and, 36-37, 38, 39
setting of, 33-38, 50, 212-213
supply of insurance and, 6
Price-Anderson Act, 224
Price Waterhouse, 151
Principal-agent conflicts, 177-178
Probability of natural disaster, 4, 30, 86
Probable maximum loss
applications, 26
hurricanes, 116
supply of insurance and, 94
Property at risk, 9
Property Claim Services, 70, 99, 104
Property-casualty insurance companies, 22-23, 79-80
Property insurance, coastal development and, 6
Property insurance, defined, 22
Prospective loss costs, 180
Prospective pricing of risk, 198
Public Protection Grading System, 137-138
R
Rates
actuarially fair, 132, 161, 185, 196, 199
building occupancy and, 235
computer modeling, 123
earthquake insurance, 77, 83-84, 90
hurricane insurance, 106, 109, 114-115, 116, 117, 120, 123
location and, 236
National Flood Insurance Program, 132-134
process of setting, 83-84, 216
regulation of, 33, 109, 159, 173, 179, 180, 184, 185, 188, 197-200, 206
reinsurance, 120
residual market mechanisms, 114-115, 116, 117, 120
Rating agencies, 194
Real estate sector, role of, 9
Regulation.
See also Financial regulation;
Insurance regulation
Community Rating System creditable activities, 136
natural hazards mitigation through, 163-164
Reilly, Frank, 161
Reinsurance
Bermuda, 121-122
consolidation among reinsurers, 47-48
excess coverage, 202
excess-of-loss treaty, 46-47
federal, 93-94, 160, 161, 224-225
geographic diversification, 47
hurricane, 106, 110, 118, 120-122
industry, 7
international nature, 47
market conditions, 47-48
monoline catastrophe companies, 121-122
premiums, 160
pro rata treaty, 46
quota share treaty, 46
second event coverage, 118
security, 47-48
Report on Floods and Flood Damage, 40
Residential coverage
floods, 40
hailstorms, 40-41
hurricanes, 41
landslides, 41
lightning, 42
mobile homes, 114-115
supply of, 39-44
tornadoes, 42
tsunamis, 43
value of insured exposures, 41, 102, 104
volcanic eruption, 44
wildfires, 43
winter storms, 43
Residential Property and Casualty Joint Underwriting Association, 113-118
Residual market mechanisms
assessments on insurers, 107, 108, 111, 112, 113, 115, 119
beach and wind plans, 48-49
defined, 48
evaluation of, 49
FAIR plans, 48
federal, 48
policy questions, 202
role, 48
Retrofitting, 90, 166, 167, 201
Risk
identification of, 27-31
level of, 84
management services, 23
retention groups, 190
sharing, see Coinsurance
spreading, 18, 20-21, 56-57, 90, 161
transfer, 195
type, knowledge of, 34-35
Risk assessment.
See also Models/modeling of risks
estimating, 216-221
in individual decision making, 52-54
public-private collaboration, 123, 198
questions about, 217
research needs, 199
and reserves, 194
scientific, 28-30, 31, 91, 197
Risk Management Solutions, 123
Risk perceptions
and demand for insurance, 54, 56, 60-61, 63, 64, 66, 149
flood control measures and, 125, 130
and hazard mitigation measures adopted, 64-65, 68
Risk-taking preferences, 54
S
Sanibel Island, Florida, 137
Small Business Administration, 11, 152
Small businesses, 237-238
Social costs of disasters, 10, 156-157
Social welfare, 3
Solvency of firms, 173, 176, 177-178, 183, 184, 185, 186, 191-192, 195, 196, 197
Southeast Hurricane Disaster Relief Act of 1965, 126
Southern California Earthquake Center, 86
Spinners Mutual, 21
Stafford Disaster Relief and Emergency Assistance Act of 1988, 10, 151
Standard and Poor rating, 106, 194
Stock insurance companies, 20, 21, 80-81, 173
Structures, classification of, 233-235
cross-subsidies of insurance, 191, 197, 199-200, 202-203
and hazard mitigation, 204
National Flood Insurance Program, 132, 134, 139, 142, 143, 150-151, 162
Supply of coverage
alternative financing methods, 44, 46-49
claims adjustment practices and, 201
determinants of, 210
financial regulation and, 193-194
and hazard mitigation, 169
insolvencies and, 108
insurability conditions and, 27-39
premium determination, 212-213
probable maximum loss and, 94
regulation and, 172, 184-185, 189, 191, 202, 207
residential, 39-44
by type of insurance, 39-44
Swiss Re, 223
T
Tax-exempt bonds, 107, 112, 113
Third-party insurance, 22
Tornadoes, 42
Tsunamis, 43
Tulsa, Oklahoma, 137
U
Underwriters Laboratories, 20
Underwriting, 84, 89, 134, 190, 200-201, 213, 223, 233-235
Uninsured residents and victims, 6
behavior, 37
grants and low-interest loans, 3, 11
special relief measures, 71-72
United States v. South-Eastern Underwriters Ass'n, 174
Urban Property Protection and Reinsurance Act, 48
U.S. Department of the Interior, 146
U.S. Geological Survey, 85, 86, 246, 254
V
W
Wildfires.
See also Fires
defined, 43
insurance pools, 43
Windstorm insurance.
See also Florida hurricane insurance protection
coverage, 40-41, 48-49, 97, 210
history, 21-22
hurricanes, 41
profitability, 39
tornadoes, 42
Winter storms, 43
World Wide Web Sites
addresses, 255-259
alternative risk financing, 253
Congressional hazard mitigation measures, 253
disaster finder, 254
Federal Emergency Management Agency, 253
National Flood Insurance Program, 252
natural hazards information, 254
Write-Your-Own Program, 153
Financial Control Plan, 135
Institute for Business and Home Safety Flood Committee, 135
Standards Committee, 135
X
Xenia, Ohio, 42