Takeaway: Frictional costs of managing tail risks help explain the rapid rise of homeowners insurance premiums in Florida.
To improve affordability, policy could focus on reducing these costs, e.g., expanding reinsurance supply.
Preliminary paper here: papers.ssrn.com/sol3/papers....
papers.ssrn.com
Pricing Climate Risk: Hurricane Models and Home Insurance Over the Last Two Decades
To what extent do rising homeowners insurance premiums reflect growing climate risk? We examine hurricane risk in Florida and how insurers price it. Insurers re
