The Protection Gap in Homeowners Insurance: An Introduction

Abstract

In the past few years the insurance community has paid increasing attention to the “protection gap”—the extent to which significant property losses are not covered by insurance. Because insurance plays an important economic and social role in many ways, the protection gap is significant to individuals, firms, the communities in which they reside or operate, and the economy as a whole. This paper explores protection gaps in the context of homeowners insurance in the United States: what they are, where they occur, what causes them, and how to cure them.