Widely held property insurance helps manage the social and economic cost of natural hazard events for property owners and communities. It also lowers the potential fiscal costs for the government to facilitate recovery. Property insurance also has wider economic benefits by providing the confidence necessary for economic activity and investment, such as banks requiring evidence of insurance coverage to lend against properties.
Similar benefits exist in other forms of insurance - such as life and disability insurance - that support the willingness of individuals and businesses to take risks and protect them from financial hardship. The Canterbury earthquakes revealed high levels of insurance penetration for home insurance in New Zealand.