This is the central finding of “How are insurance markets adapting to climate change? Risk classification and pricing in the marketplace for homeowners insurance“National Bureau of Economic Research Working Paper (NBER Working Paper No. 32625) June 2024 by Judson Boomhower of UC San Diego, Meredith Fowley of UC Berkeley, Jacob Gelman of the University of Alaska Anchorage, and Andrew J. Plantinga of UC Santa Barbara. Proprietary parcel-level, with regulatory filings from approximately 100,000 insurers in California Using wildfire risk data from households, it documents what the authors call the “winner’s curse” at the heart of the US wildfire insurance market.
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