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Disaster Aid, Insurance, and Fairness: Household and Firm Perceptions of Flood Policy in Germany

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  • Nicola Garbarino
  • Sascha Möhrle
  • Florian Neumeier
  • Marie-Theres von Schickfus

Abstract

Key Messages• At the EU level, underinsurance is widespread and poses fiscal risks. The debate in Germany reflects a broader need for insurance-based climate adaptation mechanisms.• Public expectations of government flood aid in Germany are surprisingly low – putting common concerns of moral hazard and “charity hazard” into perspective.• When informed about generous past aid, households – especially uninsured ones in low-risk areas – show significantly more support for mandatory flood insurance.• This change is driven by fairness concerns rather than self-interest or beliefs about overall efficiency.• Overall, firms also have low aid expectations. Support for insurance increases or decreases depending on prior aid expectations and current insurance status.

Suggested Citation

  • Nicola Garbarino & Sascha Möhrle & Florian Neumeier & Marie-Theres von Schickfus, 2025. "Disaster Aid, Insurance, and Fairness: Household and Firm Perceptions of Flood Policy in Germany," EconPol Policy Brief 74, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:econpb:_74
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    References listed on IDEAS

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    1. Andor, Mark A. & Osberghaus, Daniel & Simora, Michael, 2020. "Natural Disasters and Governmental Aid: Is there a Charity Hazard?," Ecological Economics, Elsevier, vol. 169(C).
    2. Coate, Stephen, 1995. "Altruism, the Samaritan's Dilemma, and Government Transfer Policy," American Economic Review, American Economic Association, vol. 85(1), pages 46-57, March.
    3. Nicola Garbarino & Sascha Möhrle & Florian Neumeier & Marie-Theres von Schickfus, 2025. "Disaster Aid and Support for Mandatory Insurance: Evidence from a Survey Experiment," CESifo Working Paper Series 11884, CESifo.
    4. Kousky, Carolyn & Michel-Kerjan, Erwann O. & Raschky, Paul A., 2018. "Does federal disaster assistance crowd out flood insurance?," Journal of Environmental Economics and Management, Elsevier, vol. 87(C), pages 150-164.
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