Disaster Resilience and Insurance
Economic puzzle
Insurance can pool idiosyncratic losses and signal risk, but disasters can damage many properties at once. Affordability rules, expected relief, mitigation, insurer capital, and location choices interact.
Question directions
- How do disaster declarations, aid, and mitigation grants vary across hazards or places?
- Can a means-tested subsidy preserve risk-based prices better than a broad premium cap?
- When does a public backstop improve welfare, and which costs does it shift to taxpayers?
- How do disclosure, building codes, or verified mitigation change take-up and expected loss?
Model hook
Start with actuarial expected loss, then add expenses, capital cost, and correlated claims:
\text{premium} =E[\text{claim}] +\text{administration} +\text{capital and reinsurance} +\text{margin}.
Keep insurance pricing, household affordability, and social risk reduction as three separate objectives.
Official starting evidence
- OpenFEMA offers machine-readable downloads and APIs for declarations, assistance, mitigation, flood-insurance, and other program data.
- The Disaster Declarations Summaries API provides declaration type, dates, incident type, and declared areas.
- State insurance departments and local mitigation plans can supply market rules and implementation detail.
Feasible unit of analysis
Choose one hazard and a defined geography or policy change. A federal disaster declaration is an administrative outcome; it is not a complete measure of physical hazard, total loss, or household welfare.
Use TL Chapter 12 as the starting framework. Distinguish correlation from tail risk and identify the institutional assumptions behind each policy claim.