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Flood risks and willingness to purchase flood insurance.

Water Resources Research

By:
and

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Abstract

Computer simulation experiments were conducted to determine the effects of alternative sources of uncertainty on the willingness to pay for flood insurance. Two alternative insurance protection schemes were investigated: coinsurance and fixed coverage. The question investigated is to what extent does the insurance scheme influence how purchasers respond to risks? Floods were assumed to be log normally distributed and the effects on the purchase of insurance of uncertainties in the parameters of the distribution were explored using response surface analysis. Results indicate that fixed coverage insurance provisions shift most of the uncertainty in the physical parameters governing natural disaster occurrences away from the insuree and onto the insurer. The results also show that the form of the damage function has little effect on the demand for flood insurance.- Authors

Additional Publication Details

Publication type:
Article
Publication Subtype:
Journal Article
Title:
Flood risks and willingness to purchase flood insurance.
Series title:
Water Resources Research
Volume
16
Issue:
4
Year Published:
1980
Language:
English
Larger Work Type:
Article
Larger Work Subtype:
Journal Article
Larger Work Title:
Water Resources Research
First page:
617
Last page:
622