Howard Kunreuther, a Professor of Decision Sciences and Business Economics and Public Policy at the Wharton Business School speaks with about using multi year insurance policies to cover extreme risk.

Professor Kunreuther advocates for the use of multiyear insurance policies to pay for extreme risks. He suggests adding a home improvement-type loan to the policy to encourage mitigation. The benefit of a multi year policy is that premiums are stable, consumers don’t have to worry about their policy being cancelled, insurers would lower marketing costs, and there would better risk data over several year. Professor Kunreuther thinks that Flood insurance is a good candidate for this type of program.

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