Expanding the National Flood Insurance Program to Cover Coastal Erosion Damage

2003 ◽  
Vol 35 (3) ◽  
pp. 639-647 ◽  
Author(s):  
Andrew Keeler ◽  
Warren Kriesel ◽  
Craig Landry
Keyword(s):  
Management Strategies ◽  
Nationwide Survey ◽  
Flood Insurance ◽  
National Flood Insurance Program ◽  
Erosion Damage ◽  
Considerable Uncertainty ◽  
Demand For Insurance ◽  
Insurance Program ◽  
Property Owners ◽  
The Cost

This paper uses the results of a nationwide survey of coastal property owners to estimate the demand for insurance against erosion damage. The National Flood Insurance Program (NFIP) does not technically cover such damage, although in practice there is considerable uncertainty about this point. The ability to insure against such losses has implications for the choice of beach management strategies and for NFIP management. We find significant demand for insurance at prices in the range of current flood insurance premiums, although median willingness to pay appears to be less than the cost of providing such insurance.

The Pricing of Flood Insurance

2017 ◽  
Vol 04 (02) ◽  
pp. 1750001 ◽  
Author(s):  
Carolyn Kousky ◽  
Brett Lingle ◽  
Leonard Shabman
Keyword(s):  
Hurricane Katrina ◽  
Flood Insurance ◽  
National Flood Insurance Program ◽  
Ongoing Debate ◽  
Insurance Program ◽  
The Us ◽  
Implicit And Explicit ◽  
The Cost ◽  
Ongoing Concern ◽  
Insight Into

Despite the availability of flood insurance in the US through the National Flood Insurance Program (NFIP), many homeowners at risk of floods are not insured. The program went deeply into debt after Hurricane Katrina in 2005 and Congress adopted multiple reforms to NFIP rate setting in 2012 and 2014. In response to the ongoing concern about the cost of NFIP policies, as well as multiple misunderstandings about NFIP rates, we simulate NFIP premiums for a sample of homes by constructing a premium calculator based on FEMA rating tables. These simulations highlight several aspects of NFIP rating in need of more attention. First, there are many implicit and explicit cross-subsidies in NFIP pricing, potentially distorting risk information and incentives. Second, NFIP rating is complicated, which can make it difficult for homeowners and untrained agents to evaluate options. Finally, the premiums we present offer insight into the ongoing debate about affordability of flood insurance by highlighting where policies cost the most. FEMA is actively exploring rate reform, which may address some of these concerns.

Improving the National Flood Insurance Program

2018 ◽  
pp. 1-15 ◽  
Author(s):  
HOWARD KUNREUTHER
Keyword(s):  
Cost Effective ◽  
Economic Incentives ◽  
Flood Insurance ◽  
Behavioral Risk ◽  
National Flood Insurance Program ◽  
Adaptation Measures ◽  
Insurance Program ◽  
Property Owners ◽  
The Usa ◽  
Low Probability

Abstract This paper highlights factors that need to be considered for improving the National Flood Insurance Program in the USA to address the biases that lead individuals to not protect themselves against low-probability, high-consequence flood events. The errors that individuals exhibit in deciding not to purchase insurance or invest in loss reduction measures prior to a disaster can be traced to the effects of six biases: myopia, amnesia, optimism, inertia, simplification and herding. Along with two guiding principles for insurance, a behavioral risk audit can assist in designing a strategy using concepts from choice architecture coupled with economic incentives to encourage property owners in hazard-prone areas to purchase insurance and invest in cost-effective adaptation measures to protect themselves against future disaster losses.

Does the National Flood Insurance Program Have Redistributional Effects?

2017 ◽  
Vol 17 (4) ◽  
Author(s):  
Okmyung Bin ◽  
John Bishop ◽  
Carolyn Kousky
Keyword(s):  
Emergency Management ◽  
Capita Income ◽  
Federal Emergency Management Agency ◽  
Flood Insurance ◽  
Lower Income ◽  
National Flood Insurance Program ◽  
Insurance Policies ◽  
Insurance Program ◽  
Per Capita ◽  
Zip Code

AbstractThis study examines possible redistributional effects of the National Flood Insurance Program (NFIP), using a nationwide database of flood insurance policies and claims between 2001 and 2013 from the Federal Emergency Management Agency. Applying methods from the tax and transfer progressivity literature, we use the departure from per capita income proportionality at the zip code level as our measure of progressivity. Our findings indicate that premiums as a percentage of coverage purchased are regressive: premium shares are larger than income shares for lower-income zip codes. Payouts, however, also as a percentage of coverage purchased, are progressive, meaning lower-income zip codes receive a larger portion of claims paid. Overall net premiums (premiums – payouts) divided by coverage are also regressive. Our findings are driven by certain aspects of the current rate structure of the NFIP, as well as how income is related to risk. We discuss potential policies to provide assistance to lower-income households in purchasing flood insurance.

scholarly journals COASTAL STORM INDUCED EROSION PREDICTIONS FOR FEMA FIS COASTAL HAZARD RISK MAPPING

2018 ◽  
pp. 103
Author(s):  
Christina Lindemer ◽  
Jeffrey Gangai ◽  
Christopher Mack ◽  
Elena Drei-Horgan ◽  
Darryl Hatheway
Keyword(s):  
Emergency Management ◽  
Additional Data ◽  
Flood Insurance ◽  
Coastal Hazard ◽  
National Flood Insurance Program ◽  
Cross Sectional ◽  
Hazard Risk ◽  
Insurance Program ◽  
Erosion Hazards ◽  
Regulations And Guidelines

Flood Insurance Studies (FISs) produced by the Federal Emergency Management Agency (FEMA) per the National Flood Insurance Program (NFIP) regulations and guidelines adopt storm-induced erosion criteria often called the “540 rule”. The methods used in the erosion analysis have been in place since the 1980s. The method requires dunes to be classified as fully eroded, or “removed”, when their cross-sectional reservoir is smaller than 540 square feet. Since the rule’s first application, additional data and recent evidence have become available leading FEMA to identify this approach as an area of the program in need of updating and improvement. Experts involved in conducting coastal hazard analyses for FEMA studies recommend exploring opportunities to improve FEMA guidelines for erosion criterion and revise NFIP regulations and guidance, as needed, to ensure that storm-related erosion hazards are appropriately evaluated and mapped along US coastlines.

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