Pricing Protection: Credit Sco res\, Disaster Risk\, and Home Insurance Affordability.
Coauthors: Philip Mulder\, Ben Keys
Abstract
We study how locat ion and household characteristics determine homeowners insurance pricing. U sing 70 million insurance policies linked to mortgages and a property-level disaster risk model\, we show that credit scores have large effects on pre miums\, comparable in magnitude to disaster risk. In many cases\, premiums depend more on who lives in the home than on the disaster risk the home fac es. Leveraging a temporary ban on credit-based pricing in Washington State\ , we find that restricting credit information compresses the credit–premium gradient and reallocates costs. These results indicate that credit informa tion not only gets transmitted to housing costs through mortgage borrowing\ , but also through insurance pricing. We discuss mechanisms behind the cred it-premium gradient and their implications for housing affordability and th e incidence of disaster costs.
Organized by: Katherine Wagner
LOCATION:IONA 533 GEO:49.260872;-123.113952 URL;VALUE=URI:https://economics.ubc.ca/events/event/philip-mulder-wisc-labo ur-public-seminar/ END:VEVENT BEGIN:VTIMEZONE TZID:America/Vancouver BEGIN:DAYLIGHT TZOFFSETFROM:-0800 TZOFFSETTO:-0700 DTSTART:20250309T100000 TZNAME:PDT END:DAYLIGHT END:VTIMEZONE END:VCALENDAR