Title page
Contents
Executive Summary 4
1. Introduction 8
2. Institutional Background 10
2.1. An Overview of the NFIP 10
2.2. Insurance Coverage for Wildfire Damage 11
2.3. Comparison of the Perils 12
2.3.1. Similarities 12
2.3.2. Differences 13
3. Lessons from Insuring Flood Risk for Wildfire Coerage 14
3.1. Lesson 1: Most people do not voluntarily buy disaster insurance 14
3.2. Lesson 2: When insurance premiums do not reflect risks, there will be insurer solvency problems and greater exposure 15
3.3. Lesson 3: Risk-based pricing will present some affordability challenges 17
3.4. Lesson 4: Risk communication is essential but hard to do well 19
3.5. Lesson 5: Investments in risk mitigation are critical but costly and difficult 21
4. Reflections and Policy Directions 23
4.1. Improving Insurance Availability 23
4.2. Addressing Affordability 24
4.2.1. Means-testing 24
4.2.2. Public Backstop 25
4.2.3. New Insurance Products 25
4.3. Motivating Risk Reduction 25
4.3.1. Mapping, Communication, and Disclosure 26
4.3.2. Building Codes 26
4.3.3. Land Use Policy 26
4.3.4. Reducing Hazard 27
5. Conclusions 28
References 29