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Improving Flood Insurance and Flood Risk Management: Insights from St. Louis, Missouri

Author

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  • Kousky, Carolyn

    (Resources for the Future)

  • Kunreuther, Howard C.

Abstract

This paper examines the history of St. Louis, Missouri in coping with flood risk over the past 15 years, with a focus on flood insurance. Six challenges to the continued management of riverine flood risk are identified and discussed. They are (1) many property owners don’t buy flood insurance, (2) people underestimate flood risk, (3) we need better flood maps, (4) we have a “love affair” with levees, (5) flood risk is increasing over time, and (6) we take deep pride in rebuilding after a disaster. Recommendations for how to improve flood risk management in light of these challenges are offered. Focused attention is given to the possibility of long-term flood insurance contracts tied to long-term loans for risk-mitigating activities in overcoming the six challenges.

Suggested Citation

  • Kousky, Carolyn & Kunreuther, Howard C., 2009. "Improving Flood Insurance and Flood Risk Management: Insights from St. Louis, Missouri," RFF Working Paper Series dp-09-07, Resources for the Future.
  • Handle: RePEc:rff:dpaper:dp-09-07
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-09-07.pdf
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    References listed on IDEAS

    as
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    2. Erwann O. Michel‐Kerjan & Carolyn Kousky, 2010. "Come Rain or Shine: Evidence on Flood Insurance Purchases in Florida," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(2), pages 369-397, June.
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    6. Dwight Jaffee & Howard Kunreuther & Erwann Michel-Kerjan, 2008. "Long Term Insurance (LTI) for Addressing Catastrophe Risk," NBER Working Papers 14210, National Bureau of Economic Research, Inc.
    7. Unknown, 2005. "Forward," 2005 Conference: Slovenia in the EU - Challenges for Agriculture, Food Science and Rural Affairs, November 10-11, 2005, Moravske Toplice, Slovenia 183804, Slovenian Association of Agricultural Economists (DAES).
    8. David A. Grossman, 1958. "Flood Insurance: Can a Feasible Program Be Created?," Land Economics, University of Wisconsin Press, vol. 34(4), pages 352-357.
    9. P. C. D. Milly & R. T. Wetherald & K. A. Dunne & T. L. Delworth, 2002. "Increasing risk of great floods in a changing climate," Nature, Nature, vol. 415(6871), pages 514-517, January.
    10. Kunreuther, Howard C. & Michel-Kerjan, Erwann O., 2011. "At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262516543, April.
    11. Colin F. Camerer & Howard Kunreuther, 1989. "Decision processes for low probability events: Policy implications," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(4), pages 565-592.
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    Cited by:

    1. Amanda Savitt, 2017. "Insurance as a tool for hazard risk management? An evaluation of the literature," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 86(2), pages 583-599, March.
    2. James R. Meldrum, 2016. "Floodplain Price Impacts by Property Type in Boulder County, Colorado: Condominiums Versus Standalone Properties," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 725-750, August.
    3. Ewa Lechowska, 2022. "Approaches in research on flood risk perception and their importance in flood risk management: a review," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 111(3), pages 2343-2378, April.
    4. Iuliana Armas & Radu Ionescu & Cristina Posner, 2015. "Flood risk perception along the Lower Danube river, Romania," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 79(3), pages 1913-1931, December.
    5. Botzen, W.J.W. & van den Bergh, J.C.J.M., 2012. "Risk attitudes to low-probability climate change risks: WTP for flood insurance," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 151-166.
    6. R. Collenteur & H. Moel & B. Jongman & G. Di Baldassarre, 2015. "The failed-levee effect: Do societies learn from flood disasters?," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 76(1), pages 373-388, March.
    7. Ewa Lechowska, 2018. "What determines flood risk perception? A review of factors of flood risk perception and relations between its basic elements," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 94(3), pages 1341-1366, December.

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    More about this item

    Keywords

    disaster insurance; National Flood Insurance Program; risk; floods;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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