Zip Code to Impact Life Insurance Rates

According to Rebecca Knight, Providers move to postcode terrorism cover, Financial Times, May 28, 2007:

US life assurers are adopting a more aggressive model to reflect the greater likelihood that certain neighbourhoods will fall victim to terrorist attacks or catastrophes.

The move, in which the industry has implemented the kind of risk management tools previously restricted to property and casualty insurance, means that life assurers could start to charge clients according to which city or even which neighbourhood they live in. * * *

For instance, clients in neighbourhoods and postal codes that contain a large number of high-profile, high-rise buildings or are within an area with a perceived greater risk for earthquakes might cause assurers to adopt a more aggressive underwriting model.

Special thanks to Prof. Joel C. Dobris of the University of California-Davis for bringing this article to my attention.