Is fire insurable? 115
by 10% or more had been calculated twice – once as 27.5% and once as 81%
(ASIC 2005, pp. 13, 15). ASIC did not opine which number more approximated the truth. Nor to date has any further work been published doing so.
Work in the United States has fared little better. A variety of post- disaster
surveys of underinsurance have been done. The consumer advocacy group,
United Policyholders, has done a number of post- disaster surveys, finding
a range of underinsurance frequencies but generally finding it to be over
50% (United Policyholders survey 2021). One of the early pioneers studying underinsurance, Peter Wells, reported (without transparency as to data
or methodology) on his calculations of underinsurance nationwide in the
United States over several years (Wells 2007, p. 46). And after the 2008
California wildfires the California Department of Insurance (CDI) performed a Market Conduct Study on underinsurance rates, finding it to be to
approximately 80% (CDI 2010, pp. 1027–1030).
All of the analysis from Australia and the United States shares one
feature – as a stand-alone data point it is subject to critique. Either the analysis is not transparent and replicable, or it is too focused on a specific region
in a specific context, or it is contradicted by other contemporaneous work.
Yet thought of collectively, the work tells a story. Figure 9.1 is a chart of every
extant, public-facing assertion of underinsurance either in the United States
or Australia, whether regional or national, whether post-disaster or not:
This chart simultaneously is frustrating and illuminating. The chart
highlights how little currently can confidently be known in any granularity
Figure 9.1 United Policyholders
Source: United Policyholders (2021); Fried (2017); Administrative Rulemaking File (2015,
pp. 1027–1030); Wells (2007, p. 46); ASIC (2005)
by 10% or more had been calculated twice – once as 27.5% and once as 81%
(ASIC 2005, pp. 13, 15). ASIC did not opine which number more approximated the truth. Nor to date has any further work been published doing so.
Work in the United States has fared little better. A variety of post- disaster
surveys of underinsurance have been done. The consumer advocacy group,
United Policyholders, has done a number of post- disaster surveys, finding
a range of underinsurance frequencies but generally finding it to be over
50% (United Policyholders survey 2021). One of the early pioneers studying underinsurance, Peter Wells, reported (without transparency as to data
or methodology) on his calculations of underinsurance nationwide in the
United States over several years (Wells 2007, p. 46). And after the 2008
California wildfires the California Department of Insurance (CDI) performed a Market Conduct Study on underinsurance rates, finding it to be to
approximately 80% (CDI 2010, pp. 1027–1030).
All of the analysis from Australia and the United States shares one
feature – as a stand-alone data point it is subject to critique. Either the analysis is not transparent and replicable, or it is too focused on a specific region
in a specific context, or it is contradicted by other contemporaneous work.
Yet thought of collectively, the work tells a story. Figure 9.1 is a chart of every
extant, public-facing assertion of underinsurance either in the United States
or Australia, whether regional or national, whether post-disaster or not:
This chart simultaneously is frustrating and illuminating. The chart
highlights how little currently can confidently be known in any granularity
Figure 9.1 United Policyholders
Source: United Policyholders (2021); Fried (2017); Administrative Rulemaking File (2015,
pp. 1027–1030); Wells (2007, p. 46); ASIC (2005)