Hurricanes and Disaster Risk Financing Through Insurance: Challenges and Policy Options

The U.S. Atlantic and Gulf of Mexico coastal states, Hawaii, Puerto Rico, and the U.S. Virgin Island are exposed to relatively high levels of risk from hurricanes and tropical storms. The rapid expansion of the U.S. population into areas that are susceptible to hurricanes has placed millions of people and new areas of economic activity in harm’s way. To address the financial and economic effects of such risks, households and businesses have relied on private insurance, state-sponsored insurance pools, and/or federal emergency disaster assistance to manage their natural hazard risk