Insurance Protection Gap and Mitigation Research Note

Insurance Protection Gap and Mitigation Research Note

The protection gap is the difference between economic loss and insured loss. A number requires a hazard, geography, period, method, and source.

Swiss Re currently estimates a $424 billion global natural catastrophe protection gap in 2025 and reports that about 27 percent of exposure was insured under its resilience index. This is a global model result, not a household coverage recommendation.

Better catastrophe models improve hazard, exposure, vulnerability, and loss estimates. They do not directly reduce physical loss, constrain development, finance mitigation, create capacity, make premiums affordable, or increase take-up.

The NAIC national resilience strategy connects home hardening, catastrophe modeling, risk communication, solvency, and resilient insurance markets. The NAIC resilience map links selected state grant and discount programs and warns that the record is incomplete and state-specific.

FEMA mitigation planning can support eligibility for certain grant programs. It does not guarantee money to an individual property.

The NIBS 2019 report finds positive national benefit-cost ratios for several mitigation categories. These averages do not establish the value of one project.

IBHS wildfire work supports a system-based view of mitigation. One feature can fail when roofs, vents, decks, fences, walls, vegetation, neighbors, and community conditions interact.

Premium effects depend on verification, insurer rules, rate structure, expenses, capital, reinsurance, concentration, regulation, and policy design. The public page must not promise a discount or prescribe work for a specific property.