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Can Parametric Microinsurance Improve the Financial Resilience of Low-Income Households in the United States?

Carolyn Kousky (), Helen Wiley and Len Shabman
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Carolyn Kousky: University of Pennsylvania
Helen Wiley: University of Pennsylvania
Len Shabman: Resources for the Future

Economics of Disasters and Climate Change, 2021, vol. 5, issue 3, No 1, 327 pages

Abstract: Abstract Natural disaster risk is escalating around the globe and in the United States. A large body of research has found that lower-income households disproportionally suffer from disasters and are less likely to recover. Poorer households often lack the financial resources for rebuilding, endangering other aspects of wellbeing. Parametric microinsurance has been used in many developing countries to improve the financial resilience of low-income households. This paper presents a review of the evidence for implementing parametric microinsurance in the U.S., with spillover lessons for other highly developed countries. We discuss the benefits and the challenges of microinsurance in a US context and explore 4 possible distribution models that could help overcome difficulties, with policies being provided: (1) by an aggregator, (2) through a mobile-based technology, (3) by linking to other products or retailers, or (4) through a public sector insurer.

Keywords: Insurance; Microsinsurance; Disasters; Parametric insurance (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s41885-021-00088-1

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