The chapter on property insurance in Britain emphasizes the following points: In property insurance, administrative costs typically use up over 35% of premium income. In the case of terrorism insurance, the government decided to provide cost-free, stop-loss insurance, to prevent the market from breaking down. This step turned out to be an efficient intervention in the insurance market. When the country was hit by subsidence damages, the premiums and excesses for the owners in high-risk areas rose dramatically. The fact that insurance contracts can be renegotiated every year means that the owners have only a very incomplete coverage.
Keywords: Britain, duration of insurance contracts, property insurance, risk selection, subsidence, terrorism,