Risk management ends at the front door

North America

The widespread pre-occupation with natural catastrophe preparedness in the US in the wake of Hurricane Katrina has prompted a great number of surveys: the results of a few of these were less than predictable. For example, according to a recent survey by the US Insurance Research Council, 80% of Americans favoured laws that would make insurance mandatory for people living in disaster-prone areas. However, many of the respondents have not purchased insurance to cover disaster risks. For example, of those living in flood-prone area (not including those also at risk of hurricane), only 20% said they have purchased flood insurance coverage. Of those who report living in an earthquake zone, 42% say they have purchased earthquake insurance coverage. While the IRC survey found strong support for government policies aimed at mitigating risk before a natural disaster occurs, it found strong opposition to programs and policies that subsidize the cost of insurance for people in high-risk areas. Almost 60% of respondents indicated that it is unfair to use taxpayers’ money to subsidize the cost of insurance in high-risk areas.