A Data-intensive Approach to Allocating Owner vs. NFIP portion of Average Annual Flood Losses

Rahim, Md Adilur; Freidland, Carol; Rohli, Robert V.; Bushra, Nazla; Mostafiz, Rubayet Bin

doi:10.1002/essoar.10509884.1

Cited by 16 publications

(13 citation statements)

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“…The contribution of this research is the development of a novel method to estimate flood hazard characteristics based on existing hydrologic-modeled flood surfaces. Ultimately, this technique will help government agencies and community officials to formulate policies and homeowners to make more informed decisions regarding insurance purchase (Rahim et al, 2021 , 2022b ), mitigation strategy (Zhou et al, 2012 ; Zarekarizi et al, 2020 ), and long-term planning (Gnan et al, 2022b , c ).…”

Section: Introductionmentioning

confidence: 99%

A data-driven spatial approach to characterize the flood hazard

et al. 2022

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Model output of localized flood grids are useful in characterizing flood hazards for properties located in the Special Flood Hazard Area (SFHA—areas expected to experience a 1% or greater annual chance of flooding). However, due to the unavailability of higher return-period [i.e., recurrence interval, or the reciprocal of the annual exceedance probability (AEP)] flood grids, the flood risk of properties located outside the SFHA cannot be quantified. Here, we present a method to estimate flood hazards that are located both inside and outside the SFHA using existing AEP surfaces. Flood hazards are characterized by the Gumbel extreme value distribution to project extreme flood event elevations for which an entire area is assumed to be submerged. Spatial interpolation techniques impute flood elevation values and are used to estimate flood hazards for areas outside the SFHA. The proposed method has the potential to improve the assessment of flood risk for properties located both inside and outside the SFHA and therefore to improve the decision-making process regarding flood insurance purchases, mitigation strategies, and long-term planning for enhanced resilience to one of the world's most ubiquitous natural hazards.

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Section: Introductionmentioning

confidence: 99%

A data-driven spatial approach to characterize the flood hazard

et al. 2022

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“…The building AAL (𝐴𝐴𝐿 ) is estimated using the method presented in Gnan (2021) and Gnan et al (2022a). Flood depths derived from Monte Carlo simulations (e.g., Brodie, 2013;Hennequin et al, 2018;Kind, 2014;Kind et al, 2020;Qi et al, 2013;Rahim et al, 2021Rahim et al, , 2022aRahman et al, 2002;Taghinezhad et al, 2020;Yu et al, 2013) with the fitted Gumbel extreme value distribution (e.g., Al Assi et al, 2022;Bhat et al, 2019;Gnan et al, 2022b;Kim & Lee, 2021;Manfreda et al, 2021;Mostafiz et al, 2021a;2022b;Rahim et al, 2022b;Singh et al, 2018) are translated to building loss percentages using the U.S. Army Corps of Engineers (USACE; 2000) depth-damage function (DDF) designed for the home's attributes (e.g., onestory or two-or-more stories, with or without basement). The loss percentages are then multiplied by the structure replacement cost (i.e., building value, 𝐵𝑉), and the average of the resulting losses of all Monte Carlo-simulated flooding events is the AAL.…”

Section: Building Aalmentioning

confidence: 99%

Freeboard Life-Cycle Benefit-Cost Analysis of a Rental Single-family Residence for Landlord, Tenant, and Insurer

Gnan

Mostafiz

Rahim

et al. 2022

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Abstract. Flood risk to single-family rental housing remains poorly understood, leaving a large and increasing population underinformed to protect themselves, including regarding insurance. This research introduces a life-cycle benefit-cost analysis for the landlord, tenant, and insurer (i.e., National Flood Insurance Program (NFIP)) to optimize freeboard (i.e., additional first-floor height above the base flood elevation (BFE)) selection for a rental single-family home. Flood insurance premium; apportioned flood risk among the landlord, tenant, and NFIP by insurance coverage and deductible; rental loss; moving and displacement costs; freeboard construction cost; and rent increase upon freeboard implementation are considered in estimating net benefit (NB) by freeboard. For a 2,500 square-foot case study home in Metairie, Louisiana, a two-foot freeboard optimizes the combined savings for landlord and tenant, with joint life-cycle NB of $23,658 and $14,978, for a 3 % and 7 % real discount rate, respectively. Any freeboard up to 2.5 feet benefits the tenant and NFIP, while the landlord benefits for freeboards up to 4.0 feet. Collectively, results suggest that at the time of construction, even minimal freeboard provides substantial savings for the landlord, tenant, and NFIP. The research provides actionable information, supporting the decision-making process for landlords, tenants, and others, thereby enhancing investment and occupation decisions.

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“…Another research gap in the use of LCBCA for optimizing freeboard height for a new, single-family residence is the disaggregation of costs between the affected parties. The freeboard cost and flood premiums are considered owner costs, but the expected average annual loss (AAL) should be assessed by allocating appropriate portions to the owner and the NFIP (Rahim et al, 2021), as insured homeowners are liable only for the deductible and losses exceeding the coverage amount and NFIP covers the outstanding costs less the deductible. Disaggregation of the costs is important not only for identifying expenses to the affected parties but also to ensure more accuracy for the decision-making process (Sayers, 2013).…”

Section: Introductionmentioning

confidence: 99%

Economically optimizing elevation of new, single-family residences for flood mitigation via life-cycle benefit-cost analysis

Gnan

Friedland

Mostafiz

et al. 2022

Front. Environ. Sci.

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Construction with freeboard—vertical height of a structure above the minimum required—is commonly accepted as a sound investment for flood hazard mitigation. However, determining the optimal height of freeboard poses a major decision problem. This research introduces a life-cycle benefit-cost analysis (LCBCA) approach for optimizing freeboard height for a new, single-family residence, while incorporating uncertainty, and, in the case of insured homes, considering the costs from losses, insurance, and freeboard (if any) to the homeowner and National Flood Insurance Program (NFIP) separately. Using a hypothetical, case study home in Metairie, Louisiana and U.S. Army Corps of Engineers design depth-damage functions for generic inland flooding, results show that adding 2 ft of freeboard at the time of construction might be considered the optimal option given that it yields the highest net benefit, but the highest net benefit-cost ratio occurs for the 1 ft freeboard. Even if flood loss reduction is not considered when adding freeboard, the savings in annual insurance premiums alone are sufficient to recover the construction costs paid by the homeowner if at least one foot of freeboard is included at construction. Collectively, these results based on conservative assumptions suggest that at the time of construction, even a small amount of freeboard provides a huge savings for the homeowner and (especially) for the financially-strapped National Flood Insurance Program. For community planners, the results suggest that wise planning with reasonable expectations on the front end makes for a more sustainable community.

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A Data-intensive Approach to Allocating Owner vs. NFIP portion of Average Annual Flood Losses

Cited by 16 publications

References 0 publications

A data-driven spatial approach to characterize the flood hazard

A data-driven spatial approach to characterize the flood hazard

Freeboard Life-Cycle Benefit-Cost Analysis of a Rental Single-family Residence for Landlord, Tenant, and Insurer

Economically optimizing elevation of new, single-family residences for flood mitigation via life-cycle benefit-cost analysis

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