Housing resilience agencies should be created to take over US home disaster insurance and risk reduction oversight as more people are left unprotected when natural catastrophes hit, the Climate & Community Institute says.

Resilience agencies created either by states or the federal government would be more effective in providing disaster-related cover than profit-motivated private insurers or existing state-backed arrangements, the think tank argues.

“Narratives undergirding the current home insurance system in the US lack effectiveness and equity,” it says. “Risk-based pricing does not effectively reduce risk and causes unacceptable inequities, and existing public insurance programs are floundering because of design flaws – not because public insurance can’t work.”

The group’s report – Shared Fates: A Housing Resilience Policy Vision for the Home Insurance Crisis – says state risk reduction is not being deployed at sufficient scale and insurer discounts for retrofits are falling short.

“Establishing state-level public disaster insurance coupled with a comprehensive risk reduction program under the banner of [a housing resilience agency] would create a more direct relationship between risk reduction and insurance provision,” it says.

Private insurers are increasingly limiting or eliminating coverage of hazards that cause major disasters, with implications for the housing finance system and community stability, driving the need for an alternative approach, the group argues.

The report looks in detail at Florida, California and Minnesota, which faces more frequent secondary perils such as hailstorms and severe winds, and says the issues are relevant across the country, with many locations dealing with multiple climate hazards.

“We are all at risk from some kind of disaster, and climate change is only making that truer. These risks are not individual ones, and the ability to sufficiently mitigate them is also not individual.”

Housing resilience agencies would provide “comprehensive disaster insurance” by pooling risks across a state, while private insurers would still serve the basic home market for coverage such as theft and burst pipes.

The institute says it is a progressive climate and economy think tank with a network of more than 60 academic and expert fellows. The report is available here.