Understanding the effects of past flood events and perceived and estimated flood risks on individuals' voluntary flood insurance purchase behavior

Water Res. 2017 Jan 1;108:391-400. doi: 10.1016/j.watres.2016.11.021. Epub 2016 Nov 5.


Over the past several decades, the economic damage from flooding in the coastal areas has greatly increased due to rapid coastal development coupled with possible climate change impacts. One effective way to mitigate excessive economic losses from flooding is to purchase flood insurance. Only a minority of coastal residents however have taken this preventive measure. Using original survey data for all coastal counties of the United States Gulf Coast merged with contextual data, this study examines the effects of external influences and perceptions of flood-related risks on individuals' voluntary behaviors to purchase flood insurance. It is found that the estimated flood hazard conveyed through the U.S. Federal Emergency Management Agency's (FEMA's) flood maps, the intensities and consequences of past storms and flooding events, and perceived flood-related risks significantly affect individual's voluntary purchase of flood insurance. This behavior is also influenced by home ownership, trust in local government, education, and income. These findings have several important policy implications. First, FEMA's flood maps have been effective in conveying local flood risks to coastal residents, and correspondingly influencing their decisions to voluntarily seek flood insurance in the U.S. Gulf Coast. Flood maps therefore should be updated frequently to reflect timely and accurate information about flood hazards. Second, policy makers should design strategies to increase homeowners' trust in the local government, to better communicate flood risks with residents, to address the affordability issue for the low-income, and better inform less educated homeowners through various educational programs. Future studies should examine the voluntary flood insurance behavior across countries that are vulnerable to flooding.

Keywords: Decision making; Flood insurance purchase; Flood maps; Flood risk; Risk communication.

MeSH terms

  • Climate Change
  • Disasters*
  • Floods*
  • Forecasting
  • Humans
  • Insurance / economics*
  • Surveys and Questionnaires
  • United States