Penn Wharton Public Policy Initiative

Publication Date

10-2013

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Volume

1

Number

9

Document Type

Brief

Summary

The United States has entered a new era of catastrophes, of which floods have been the most devastating. Through its 2012 reform (Biggert-Waters Act), the 45-year old federally-run National Flood Insurance Program has an opportunity to highlight the role that risk-based premiums can play in encouraging individuals to undertake loss reduction measures. But the implementation of this reform is now being challenged due to concerns that residents cannot afford risk-based premiums. The authors of this brief propose that this can be overcome by successfully combining risk-based pricing, required insurance, means-tested insurance vouchers, and mitigation loans, so that individuals reduce their flood risk and are financially protected against future disaster losses, thus reducing the need for taxpayer money for disaster relief in the future.

License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial 4.0 License

Keywords

National Flood Insurance Program, Risk Management

Implementing the National Flood Insurance Reform Act in a New Era of Catastrophes

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