Flood Insurance Coverage in the Coastal Zone |
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| Authors: | Craig E Landry Mohammad R Jahan‐Parvar |
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| Institution: | 1. Craig E. Landry is Associate Professor, Department of Economics, Interim Director, Center for Natural Hazards Research, East Carolina University.;2. Mohammad R. Jahan‐Parvar is Assistant Professor, Department of Economics, East Carolina University. The authors can be contacted via e‐mail: landryc@ecu.edu and jahanparvarm@ecu.edu. |
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| Abstract: | We explore determinants of flood insurance demand in the coastal zone using micro‐data for nine Southeastern counties. Overall estimates indicate price inelastic demand, though subsidized policyholders have greater coverage and are more price sensitive. Mortgage borrowers exhibit no greater coverage; only 12 percent in 100‐year flood zone indicate flood insurance was required by their lender. Flood insurance demand is increasing in the levels of flood and erosion risk. We find a positive correlation between household income and coverage, but the effect is not monotonic. Community‐level erosion hazard mitigation projects influence flood insurance coverage, with beach replenishment acting as a complement. |
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