The Role of Formal and Informal Insurance Mechanisms for Reducing Urban Disaster Risk: A South–North Comparison

Wamsler, Christine; Lawson, Nigel

doi:10.1080/02673037.2011.542087

Cited by 20 publications

(10 citation statements)

References 14 publications

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“…Insurance claims for weather-related causes are harder to interpret since they reflect risk transfer for the householder (less vulnerability). On the other hand, insurance arrangements that provide cover in flood-prone situations may promote moral hazard that encourages further development in floodplains (more vulnerability) or reduces incentives on the part of householders to implement risk-reduction measures (Wamsler and Lawson, 2011). Clearly, a holistic view of flood risk metrics (including socio-economic trends) is necessary to fully understand the net vulnerability of populations living in flood-prone areas.…”

Section: Enabling Environment For Adaptationmentioning

confidence: 99%

“…Flood insurance can be both an incentive and a barrier to adaptation. As noted above, insurance can foster a degree of complacency about flooding (Wamsler and Lawson, 2011) and encourage continued occupation of floodplains (Burby, 2001). Others claim that social welfare improves (in the Netherlands) when insurance companies take responsibility for part of the risks associated with climate change (Botzen and van den Bergh, 2008).…”

Section: Enabling Environment For Adaptationmentioning

confidence: 99%

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Adapting to flood risk under climate change

Wilby

Keenan

2012

Progress in Physical Geography: Earth and Environment

310

162

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Flooding is the most common natural hazard and third most damaging globally after storms and earthquakes. Anthropogenic climate change is expected to increase flood risk through more frequent heavy precipitation, increased catchment wetness and sea level rise. This paper reviews steps being taken by actors at international, national, regional and community levels to adapt to flood risk from tidal, fluvial, surface and groundwater sources. We refer to existing inventories, national and sectoral adaptation plans, flood inquiries, building and planning codes, city plans, research literature and international policy reviews. We distinguish between the enabling environment for adaptation and specific implementing measures to manage flood risk. Enabling includes routine monitoring, flood forecasting, data exchange, institutional reform, bridging organizations, contingency planning for disasters, insurance and legal incentives to reduce vulnerability. All such activities are ‘low regret’ in that they yield benefits regardless of the climate scenario but are not cost-free. Implementing includes climate safety factors for new build, upgrading resistance and resilience of existing infrastructure, modifying operating rules, development control, flood forecasting, temporary and permanent retreat from hazardous areas, periodic review and adaptive management. We identify evidence of both types of adaptation following the catastrophic 2010/11 flooding in Victoria, Australia. However, significant challenges remain for managing transboundary flood risk (at all scales), protecting existing property at risk from flooding, and ensuring equitable outcomes in terms of risk reduction for all. Adaptive management also raises questions about the wider preparedness of society to systematically monitor and respond to evolving flood risks and vulnerabilities.

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Section: Enabling Environment For Adaptationmentioning

confidence: 99%

Section: Enabling Environment For Adaptationmentioning

confidence: 99%

Adapting to flood risk under climate change

Wilby

Keenan

2012

Progress in Physical Geography: Earth and Environment

310

162

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“…The present situation also provides disincentives to the degree of ‘ownership’ of the flood‐risk issue by households. In previous work, a survey of flood‐affected households in Manchester (Wamsler and Lawson ) suggested a tendency to rely on home insurance and to see this as a sufficient means of dealing with flood risk. In other words, the possession of insurance mitigates worries about flood risk, as well as, for those affected, the psychological effects of past flood experiences (Werritty et al .…”

Section: Discussionmentioning

confidence: 99%

Insurance and sustainability in flood‐risk management: the UK in a transitional state

Ball¹,

Werritty²,

Geddes³

2013

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The emerging new paradigm of 'sustainable flood-risk management' , emphasising non-structural management approaches over engineered defences, is subject to differing, and sometimes contested, interpretations by key actors. This is well illustrated by the present lack of agreement between the UK government and the private insurance sector on the future of flood insurance. This paper examines the diversity of views on how best to manage flood risk, given projected changes in the UK insurance market. The issues examined comprise: the linkage of flood defences to the insurability of properties at risk, possible implications of partial or full removal of cross-subsidisation of policies, and the sustainability of communities in high flood-risk areas. Finally, the paper looks critically at alternative models that might be applied in the future, based on international experience, which may offer a means of securing insurance for high flood-risk areas, while also being compatible with sustainable flood-risk management policies.

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“…While there is evidence that householders who are motivated to act themselves to take responsibility for mitigating, adapting, and responding to extreme weather events are likely to be more resilient (Prior & Eriksen, 2013), the decision to purchase insurance may not contribute to this outcome. Indeed, studies in Australia and the UK have found that uninsured people often recover better, because they have built strong social networks in place of reliance on insurance (Keogh, Apan, Mushtaq, King, & Thomas, 2011; Wamsler & Lawson, 2011). As O'Hare et al (2016) observe, householders can be disempowered after a disaster event as insurers take control of properties and control repairs, and do not necessarily facilitate adaptive mitigation measures.…”

Section: Responsibility For Climate Adaptationmentioning

confidence: 99%

Privatizing climate adaptation: How insurance weakens solidaristic and collective disaster recovery

Lucas

Booth

2020

WIREs Climate Change

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As losses from extreme weather events grow, many governments are looking to privatize the financing and incentivization of climate adaptation through insurance markets. In a pure market approach to insurance for extreme weather events, individuals become responsible for ensuring they are adequately covered for risks to their own properties, and governments no longer contribute funds to post-disaster recovery. Theoretically, insurance premiums signal the level of risk faced by each household, and incentivize homeowners to invest in adaptive action, such as retrofitting, or drainage work, to reduce premiums. Where risk is considered too high by insurance markets, housing is devalued, in theory leading to retreat from risky areas. In this review article, we evaluate the suitability of private insurance as a mechanism for climate adaptation at a household and community level. We find a mismatch between social understandings of responsibility for climate risks, and the technocratic, market-based home insurance products offered by private insurance markets. We suggest that by constructing increasingly individualized, technical, and calculative evaluations of risk, market-based models of insurance for extreme weather events erode the solidaristic and collective discourses and practices that support adaptive behavior.

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The Role of Formal and Informal Insurance Mechanisms for Reducing Urban Disaster Risk: A South–North Comparison

Cited by 20 publications

References 14 publications

Adapting to flood risk under climate change

Adapting to flood risk under climate change

Insurance and sustainability in flood‐risk management: the UK in a transitional state

Privatizing climate adaptation: How insurance weakens solidaristic and collective disaster recovery

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