Abstract
The insurance coverage for natural disasters remains low in many exposed areas, particularly in Latin America and the Caribbean. Reduced availability or unaffordability of insurance are commonly identified as the primary causes for this low insurance coverage. The French overseas departments provide a rare example of a well-developed supply of natural disaster insurance. They offer an exceptional opportunity to analyze the demand-side determinants of insurance coverage in these highly exposed regions. Based on unique household-level microdata, I estimate a structural model of insurance supply and demand. Because my data set combines detailed information on both insured and uninsured households, I can analyze the extensive margin in the insurance market, that is, the insurance take-up. I show that the low insurance take-up rate in the French overseas departments is mainly due to uninsurable housing and the anticipation of assistance.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
