S/F/121. Many American families and small businesses affected by Hurricanes Katrina and Rita were apparently uninsured. Discuss the individual behavioural factors which might explain why these individuals chose not to purchase insurance cover against the risk of potential windstorm damage to property, possessions and businesses

The paper examines the purchasing behaviour towards the natural disaster insurance focusing on the economic losses of Hurricanes Katrina and Rita in the USA. The problem of decision making about low probability events is discussed on the basis of the Prospect theory, personal behavioural factors, ethnic background, etc.