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Consumers tend to purchase too little insurance or purchase it too late. Consequently, taxpayers wind up bearing substantial burdens for paying reconstruction costs from extreme events. The 2005 and 2012 hurricane seasons alone cost taxpayers nearly $150 billion. There is much that can be done to better facilitate the role that insurance can play in addressing losses from extreme events, both natural and man-made.
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Kunreuther, Howard, "Insurance against Extreme Events: Pairing Short-Term Incentives with Long-Term Strategies" (2016). Penn Wharton Public Policy Initiative. 1.