1992/06/01 by Risa Palm, Michael Hodgson, Michael E. Hodgson · 55 citations
Economics, Econometrics and Finance · Environmental Science · Social Sciences · #Actuarial science #Business #Casualty insurance #Demographic economics #Disaster Management and Resilience #Economics #Environmental health #Equity (law) #Flood Risk Assessment and Management #Geography #Housing Market and Economics #Insurance policy #Legislation #Political science #Population #Property insurance #Socioeconomic status
paper · doi:10.1111/j.1467-8306.1992.tb01905.x
published in Annals of the Association of American Geographers 82(2), 207-222 (American Association of Geographers)
openalex publication_date 1992/06/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01
Earthquake insurance can reduce potentially disastrous economic losses to households and is therefore a prime method of mitigating against the worst economic effects of damaging earthquakes. The decision to purchase such insurance is a special case in the general study of individual response to uncertainty in the environment. An understanding of this decision process elucidates the ways in which environmental information becomes translated into behavior change. Although California legislation has mandated the disclosure of the availability of earthquake insurance to all residential property owners since 1984, less than half of California homeowners have earthquake insurance. This paper reports on the results of a survey of 3,500 owner-occupiers in Contra Costa, Santa Clara, Los Angeles, and San Bernardino Counties conducted in the summer of 1989. The survey was undertaken to discover the locational concentrations of insurance policy-holders and the socioeconomic, demographic, and attitudinal characteristics that distinguish insured from noninsured homeowners. The results show that insurance purchase is not spatially related to geophysical risk and that the purchase of insurance is not systematically related to income, equity in the home, age of the head of household, or other socioeconomic characteristics. Instead, perceived risk is the primary factor associated with insurance purchase.