Flood insurance purchasing behavior in two Gulf Coast cities

Abstract

In coastal regions, one of the most effective ways to increase household resilience to flood damage is owning flood insurance. However, less than half of Gulf Coast residents currently own flood insurance despite experiencing elevated geographic flood vulnerability. In this study, we used public surveys to identify contributing factors to current flood ownership in Houston, Texas and New Orleans, Louisiana as well as changes to flood insurance policy that would increase reported purchasing plans in the future. In addition, we observed contributing factors to voluntary flood insurance ownership, with emphasis on potential influences of coastal hazard risk perceptions. Ordinal logistic regression was used to analyze the effects of explanatory variables on current and future flood insurance ownership. In addition, path analysis was used to test the effects of explanatory variables on voluntary flood insurance ownership mitigated by coastal hazard risk perceptions. We determined that vulnerable residents who are at high risk for flood hazards with low financial resiliency most need flood insurance but are least likely to own it. In addition, residents who voluntarily own flood insurance are most influenced by the cost of coverage and do not generally apply perceptions of coastal hazard risk when making decisions to purchase flood insurance. These findings can inform improvements to flood insurance programs in coastal communities that can allow more at-risk residents to increase their household flood resilience.