Insurance underwriting already recognizes many forms of prevention.
When a mitigation measure is observable, durable, actuarially credible,
and privately financed, it can enter expected-loss estimates and support
a lower premium. The harder cases arise before the safer risk exists.
Some investments require substantial upfront funding, produce benefits
beyond the annual policy period, and reduce losses for future insurers,
neighboring properties, public programs, or entire communities. In such
cases, accurate underwriting may recognize the improvement once it has
been made without giving any private actor enough incentive to finance
it. This article develops a simple framework that separates social, insurer,
and policyholder value, then applies it to wildfire mitigation in California,
wind mitigation and public grants in Florida, and federal hazard-mitigation
programs. The comparison shows that rate regulation, certification, and
public finance perform distinct functions. The resulting agenda is deliberately
limited: preserve adequate rates, require actuarial support for mitigation
credits, make credible certifications portable where useful, finance liquidity
constraints and public benefits outside the insurance rate, and collect
targeted data for publicly supported or mandated programs. The aim is not
to capitalize on avoided losses, weaken solvency standards, or turn insurers
into general-purpose risk managers. It is to assign each prevention problem
to the institution best equipped to address it.