disaster insurance gap

The disaster insurance gap is the amount that remains after insurance is applied to a total economic loss from a covered disaster. It reflects the extent to which insureds—individuals, businesses, communities, or governments—remain financially exposed after events such as floods, tornadoes, wildfires, earthquakes, hurricanes, or other major hazards. A large disaster insurance gap can slow recovery, increase out-of-pocket costs, and place greater pressure on public relief and rebuilding programs.