Rainfall or Rainmaking? Lawyers, Courts, and the Price of Mold Insurance in Texas

In well-functioning property—liability insurance markets, the price of coverage reflects the impact of the legal environment on the frequency and severity of claims. This article presents a case study of the Texas mold insurance crisis of 2001—2002. We provide a narrative of the controversy in Texas...

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Bibliographic Details
Published in:The Journal of risk and insurance 2012-09, Vol.79 (3), p.817-839
Main Authors: North, Charles M., Garven, James R., Gwin, Carl R.
Format: Article
Language:English
Subjects:
Appellate courts
Attorneys
Case studies
Endorsements
Flood damage
Forecasts and trends
Homeowners insurance
Insurance claims
Insurance coverage
Insurance industry
Insurance policies
Insurance providers
Liability insurance
Litigation
Lotteries
Mold
Mold damage
Personal property
Prices
Prices and rates
Property & casualty insurance
Property and casualty insurance
Regulatory reform
Studies
Water loss
Citations: Items that this one cites
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Description
Summary:In well-functioning property—liability insurance markets, the price of coverage reflects the impact of the legal environment on the frequency and severity of claims. This article presents a case study of the Texas mold insurance crisis of 2001—2002. We provide a narrative of the controversy in Texas over insurance coverage for household mold and use county-level data from a single Texas insurer to assess the determinants of postcrisis prices for supplemental mold, slab, and extended water loss coverages. We find that more attorneys per capita and more heavily Democratic courts were both associated with higher prices for mold and slab coverage.
ISSN:0022-4367
1539-6975
DOI:10.1111/j.1539-6975.2011.01457.x