Cover: Residential Insurance on the U.S. Gulf Coast in the Aftermath of Hurricane Katrina

Residential Insurance on the U.S. Gulf Coast in the Aftermath of Hurricane Katrina

A Framework for Evaluating Potential Reforms

Published Oct 8, 2010

by James W. Macdonald, Lloyd Dixon, Laura Zakaras


Download Free Electronic Document

FormatFile SizeNotes
PDF file 0.4 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.


Purchase Print Copy

 Format Price
Add to Cart Paperback20 pages $11.00

The hurricane seasons of 2004 and 2005 brought devastating losses of life and property; they also threw the residential insurance market in the Gulf States into turmoil. Insurance premiums skyrocketed, a number of private insurers retreated from coastal regions, government insurance programs stepped into the breach, and premiums in high-risk areas were subsidized by taxpayers and by policyholders in low-risk areas. To make matters worse, thousands of residents who suffered hurricane damage resorted to the courts to resolve coverage disputes with their insurers. All in all, the residential insurance system did not function well. Policymakers, deeply divided about how to reform the system to deal with these issues, have so far been unable to build consensus on how to proceed. This paper informs the current policy debate by diagnosing the problems confronting the residential insurance market and proposing objectives for a well-functioning market. The authors examine impediments limiting the private and public sectors' ability to achieve these objectives and identify a range of policy reforms that merit attention.

Research conducted by

This project was funded by the RAND Corporation's Institute for Civil Justice and the RAND Gulf States Policy Institute.

This report is part of the RAND occasional paper series. RAND occasional papers may include an informed perspective on a timely policy issue, a discussion of new research methodologies, essays, a paper presented at a conference, or a summary of work in progress. All RAND occasional papers undergo rigorous peer review to help ensure that they meet high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.