Kousky, Carolyn; Cooke, Roger - In: The Geneva Papers on Risk and Insurance - Issues and … 37 (2012) 2, pp. 206-227
It has often been observed that homeowners fail to purchase disaster insurance. Explanations have ranged from behavioural biases to information search costs. We show that the decision to forego disaster insurance may be quite rational. Solvency-constrained insurers are required to have access to...