Dr. Madeline Turland is an Assistant Professor in the Department of Resource Economics and Environmental Sociology at the University of Alberta. Her research studies natural disaster insurance markets, adaptation to natural disasters, and water resource management. She received a BA from the FARE Department at the University of Guelph in 2016, an MSc. From the University of Saskatchewan in 2018 and a PhD in Agricultural and Resource Economics from UC Davis in 2024.
Time:
1:00 to 2:30 pm
Abstract
In this paper, we examine how regulation and market structure can lead to market unraveling when firms face rapidly increasing risk due to climate change. We first present a simple model of an adversely selected disaster insurance market to investigate how price regulation and increasing climate costs impact private markets in the presence of an insurer of last resort. We then empirically study the California non-renewal moratoriums, a first-of-its-kind regulation aimed at stymieing the retreat of insurance companies from high wildfire risk areas by forcing insurers to supply insurance to current customers following disasters in 2019 and 2020. Using quasi-random geographic variation in regulatory borders and a difference-in-differences identification strategy, we find that the moratoriums successfully reduced company-initiated non-renewals in the short run. However, the effects only lasted for one year, with insurers dropping policies as soon as the moratorium lapsed. Additionally, the moratoriums had no discernible effect on participation in the State's insurer of last resort.