Thirty-five catastrophic hurricanes have caused more than $341 billion (in real 2021 dollars) of insured losses along the east coast and gulf coast of the United States since 1999.1 During the same period, coastal property homeowners’ insurance rates in the U.S have increased substantially. Nonetheless, population growth in coastal areas has consistently outpaced that of inland areas, resulting in skyrocketing property value that is exposed to hurricane risk. Large value at high risk caused a decrease in the availability and affordability of property and casualty insurance. For example, the insurance premium for a house in Gulf Shores, Alabama (the city in our sample that is closest to the coast) is 3.15 times greater than that of an identical house in Huntsville, Alabama (the major city in Alabama furthest from the coast). For houses at the coast, the wind portion of insurance premiums is about 80% of total premium.
