Property Insurance and Disaster Risk: New Evidence from Mortgage Escrow Data

Benjamin Keys and Philip Mulder

No 32579, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a new dataset to study homeowners insurance using over 74 million premiums from 2014–2024 inferred from mortgage escrow payments. We document rapidly rising premiums and a doubling of the pass-through from disaster risk into premiums. Using variation in correlated wildfire and hurricane exposure, we show that the increase in the risk-to-premium gradient was accelerated by a repricing of catastrophic risk in global capital markets. Premium increases are capitalized into home values, reducing home price growth by over $40,000 in the most exposed zipcodes. The premium and home price effects are larger in areas facing rising climate risk.

JEL-codes: G21 G22 G52 Q54 R31 (search for similar items in EconPapers)
Date: 2024-06
New Economics Papers: this item is included in nep-agr, nep-env, nep-rmg and nep-ure
Note: EEE PE
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