Search for: All records

Abstract Hurricanes significantly harm homeowners through physical damage and long-term financial strain due to rising insurance costs, property value loss, and repair expenses. This paper focuses on the interrelated decisions of the government mitigation funding of residential acquisitions and retrofit subsidies and of price restrictions on the insurance market in eastern North Carolina to determine the financial effects on stakeholders. The introduction of these policy interventions have impacts that propagate through the system due to risk adjustments, homeowner take-up behaviour, and insurer profit-maximising behaviour. This study uses an integrated game theoretic model to demonstrate that there are cost-effective government spending levels that reduce residential loss from hurricane damage. When insurance prices are capped at preintervention levels, the number of households and their distribution of losses, which has been altered through mitigation, leads to increased insurer insolvency. When insurance prices are allowed to adjust after mitigation, some homeowners find insurance is no longer affordable. This highlights the tradeoff between ensuring insurer stability and expanding homeowner insurance accessibility. 

Abstract The eastern North Carolina Coastal Area Management Act region is one of the most hurricane-prone areas of the United States. Hurricanes incur substantial damage and economic losses because structures located near the coast tend to be high value as well as particularly exposed. To bolster disaster mitigation and community resilience, it is crucial to understand how hurricane hazards drive social and economic impacts. We integrate detailed hazard simulations, property data, and labor compensation estimates to comprehensively analyze hurricanes’ economic impacts. This study investigates the spatial distribution of probabilistic hurricane hazards, and concomitant property losses and labor impacts, pinpointing particularly hard hit areas. Relationships between capital and labor losses, social vulnerability, and asset values reveal the latter as the primary determinant of overall economic consequences.