Come Rain or Shine: Evidence on Flood Insurance Purchases in Florida

By E. Michel-Kerjan, Carolyn Kousky. 2010

234 citations recorded by the source corpus.

In the U.S., flood insurance is provided essentially through the National Flood Insurance Program (NFIP), a public-private program established in 1968. In the past 10 years, the program has radically expanded to cover $1.1 trillion in assets today. This paper provides a detailed analysis of the largest flood insurance sample ever studied by focusing on the state of Florida, which accounts for 40 percent of the entire NFIP portfolio. We study the demand for flood insurance with a database of more than 7.5 million flood policies-in-force for the years 2000-2005, and all the claims filed in Florida during that period. We answer four questions: What are the characteristics of the buyers of flood insurance? What types of contracts (deductibles and coverage levels) are purchased? Where and when are claims paid and to what extent does mitigation work? How are prices determined and how much does NFIP insurance cost? Given the recent significant increase in the cost of catastrophes worldwide and the debate about the role that insurance can play to enhance adaptation to climate change, the responses to these questions shall be of interest to other countries too.

Subfields: Economics and Econometrics, Global and Planetary Change, Soil Science

View Paper: https://www.semanticscholar.org/paper/dd9e7e629b4be1ee0fe3ec2b4672f063e2222536

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. J. Gallagher
2. E. Michel-Kerjan
3. Susana Ferreira
4. Daniel Hartley
5. Ajita Atreya
6. Carolyn Kousky

In Global and Planetary Change

1. J. Gallagher
2. E. Michel-Kerjan
3. Susana Ferreira
4. Ajita Atreya
5. Carolyn Kousky
6. Randall Walsh
7. S. McCoy

In Soil Science

1. J. Gallagher
2. E. Michel-Kerjan
3. Randall Walsh
4. S. McCoy

Citations in the corpus

• What drives households to buy flood insurance? New evidence from Georgia (2015, background): “Michel-Kerjan and Kousky (2010) find that the majority of policies in Florida are located within the FEMA-defined high risk floodplains.”
• Examining Flood Insurance Claims in the United States: Six Key Findings (2017, unknown): “This also poses a problem if one tries to transfer part of the program’s exposure to the private sector, as has been proposed (Michel-Kerjan, 2010; GAO, 2014).”
• Household Finance after a Natural Disaster: The Case of Hurricane Katrina (2014, background): “Nevertheless, the federal government spent an unprecedented amount of money for direct rebuilding assistance to homeowners in the aftermath of Hurricane Katrina (Michel-Kerjan et al. [2012]; Michel-Kerjan and Kousky [2008]).”