Rothstein Associates Inc.

PAYING THE PRICE:
THE STATUS AND ROLE OF INSURANCE AGAINST NATURAL DISASTERS IN THE
UNITED STATES
Howard Kunreuther and Richard J. Roth, Sr., Editors

“This book considers the effectiveness of insurance coverage for low-probability,
high-consequence events such as natural disasters--and how insurance programs can
successfully be used with other policy tools, such as building codes and standards, to
encourage effective loss reduction measures.

“The authors discuss the reasons for the dramatic increase in insured losses from natural
disasters since 1989 and the concern that insurers have about their ability to provide
coverage against more such events in the future. It addresses why there has been an
increasing demand for hazards insurance, what types of coverage private insurers are willing
to offer, and the role of reinsurance and private-/public-sector initiatives at the state and
federal levels for providing protection to victims of natural disasters.

“Detailed case studies of the challenges facing Florida in the wake of Hurricane Andrew in
1992 and California following the Northridge earthquake in 1994 reveal the challenges facing
the insurance industry as well as other concerned stakeholders. The National Flood
Insurance Program illustrates how a public-/private-sector partnership can mitigate damages
and provide financial protection to victims.

“The book identifies new initiatives for reducing future losses and providing funds for
recovery through cooperation by the relevant parties.”

CONTENTS:
Introduction - Howard Kunreuther

Insurability Conditions and the Supply of Coverage - Howard Kunreuther

Demand for Disaster Insurance: Residential Coverage - Risa Palm

Earthquake Insurance Protection in California - Richard J. Roth, Jr.

Hurricane Insurance Protection in Florida - Eugene Lecomte and Karen Gahagan

The National Flood Insurance Program - Edward T. Pasterick

Mitigation and Insurance - William Petak

Regulation and Catastrophe Insurance - Robert Klein

A Program for Reducing Disaster Losses Through Insurance - Howard Kunreuther

Appendixes

Commercial Insurance - Eugene Lecomte

Evaluating Models of Risks from Natural Hazards - Craig Taylor, Erik VanMarcke, and Jum
Davis

Book Links to the World Wide Web - Charles Nyce

Glossary

Bibliography

Index


CONTRIBUTORS:

“HOWARD KUNREUTHER, co-editor, is the Cecilia Yen Koo Professor of Decision
Sciences and Public Policy at the Wharton School, University of Pennsylvania, as well as
Co-Director of the Wharton Risk Management and Decision Processes Center. He has a
long-standing interest in improving how society manages technological and natural disasters,
and has published extensively on the topic. Kunreuther is currently a member of the National
Research Council Board on Natural Disasters and chairs the H. John Heinz III Center Panel
on Risk, Vulnerability, and True Costs of Coastal Hazards. He is a recipient of the Elizur
Wright Award for the publication that makes the most significant contribution to the literature
of insurance, and is a Distinguished Fellow of the Society for Risk Analysis.”

RICHARD ROTH, SR., co-editor, is a retired insurance executive and property/casualty
actuary. He is a Fellow of the Casualty Actuarial Society and a professional member of the
American Meteorological Society, the American Geophysical Union, and the American
Statistical Association. He has experience with many aspects of natural hazards insurance
and was Chairman of the Federal Insurance Administration's Write Your Own (WYO)
Standards Committee for the National Flood Insurance Program. He is currently engaged as
an actuarial consultant for the H. John Heinz III Center for Science, Economics, and the
Environment for its Evaluation of Erosion Hazards project and is a member of the National
Research Council's Board on Natural Disasters.

Contributing Authors:
Jim Davis, California Division of Mines and Geology Karen Gahagan, Institute for Business
and Home Safety
Robert Klein, Georgia State University
Howard Kunreuther, University of Pennsylvania
Eugene Lecomte, Institute for Business and Home Safety
Charles Nyce, University of Hartford
Risa Palm, University of North Carolina
Edward Pasterick, Federal Emergency Management
William Petak, University of Southern California
Richard Roth, Jr., California Department of Insurance
Craig Taylor, Natural Hazards Management
Eric VanMarcke Princeton University


1998, 320 pages. Order #DR423.

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