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Title: Protecting Against Disaster Risks: Why Insurance and Prevention May Be Complements
Authors: W. J. Wouter, Botzen
Howard, Kunreuther
Erwann, Michel-Kerjan
Keywords: Flood Control-Disaster risk reduction funding, विपद जोखिम न्यूनिकरणमा आर्थिक सहायता, financiamiento para la Gestión del Riesgo de Desastre
Issue Date: Apr-2017
Publisher: Wharton
Abstract: We examine mechanisms as to why insurance and individual risk reduction activities are complements instead of substitutes. Using data on individuals’ flood preparedness activities we find that mechanisms leading to preferred risk selection are related to flood damage experienced in the past and a crowding out effect of federal disaster assistance as well as behavioral motivations to reduce risk. Insurance is a complement to loss reduction measures undertaken well before the threat of suffering a loss, while insurance acts as a substitute for damage mitigation measures that can be purchased when a loss is imminent.
Appears in Collections:Assets and Livelihoods

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