Discriminant factors of flood insurance demand for flood‐hit residential properties: a case for Malaysia

Abstract

Securing flood insurance for real estate properties in flood-hit areas is rather uncertain under the Malaysian scenario. This study attempts to identify the demand-side factors of flood insurance in coastal residential areas, and to examine how these factors differentiate between two groups of respondents, namely flood insurance purchasers and non-purchasers, using discriminant analysis. Tests using Wilks' lambda, eigenvalues, canonical correlation, functions at group centroids, and classification accuracy have provided strong evidence of significant differences between the two groups based on physical exposure/susceptibility to flood, resilience/adaptive capacity to flood, and overall perception of vulnerability. The most important variables accounting for group differences were low-elevation house site, flood depth entering house, perception about high-priced flood insurance, and level of income. The likelihood of purchasing flood insurance increased with higher physical exposure/susceptibility and overall perception of vulnerability. Resilience/ adaptive capacity to flood event also increased with higher levels of income and education.

Flood Vulnerability Assessment of Urban Traditional Buildings in Kuala Lumpur, Malaysia

“…Studies specific to Malaysia have shown that rapidly increasing flood events in recent decades are due to unrestrained occupation of rivers by human activities, destruction of forest and extreme weather events caused by climate change (Aliagha et al, 2015). Statistics show an average of 143 floods per year since 2001, of which more than 90% are flash floods (Mohd Anip and Osman, 2017).…”

Exploring the managing of flood disaster: A Malaysian perspective

“…In Malaysia, past researches showed that flood is the most common disaster affecting a number of areas especially the low area since 1920s. Past researches stated that almost 9% of the total disaster is caused by the widening of the area while almost 22% of the total population is directly affected by floods ( Salleh et al, 2013;Othman et al, 2014;Aliagha et al, 2015;Khalid & Shafiai, 2015;Tan et al, 2015). Indeed, the flood disaster is expected to keep rising in line with the increase of migration from the rural residents to the cities, changes in the structure of soil which is caused by uncontrolled development, poverty and other factors that threaten the floodplain areas (Mustaffa et al, 2014).…”

“…Indeed, the flood disaster is expected to keep rising in line with the increase of migration from the rural residents to the cities, changes in the structure of soil which is caused by uncontrolled development, poverty and other factors that threaten the floodplain areas (Mustaffa et al, 2014). Floods often occur in Malaysia due to the increase in the frequency of rainfall and the rise of the level of the sea in certain parts of the country (Aliagha et al, 2015). Furthermore, the condition of climate in Malaysia is experiencing rainfall with the average of approximately 2,500 mm a year in Peninsular Malaysia, 3,000 mm a year in Sabah and 3,500 mm a year in Sarawak (Tahir, 2009;Khalid & Shafiai, 2015;Tan et al, 2015) making it as a common natural disaster in Malaysia (Othman et al, 2014).…”

“…It is caused by the uncontrolled human activities such as infrastructure development near the river areas and uncontrolled littering causing clogged drains and waterways (Othman et al, 2014;Sipon et al, 2015). This situation is definitely worrying to the public as it has a negative impact on life, property, infrastructure, agriculture, human health and economic status which are affecting the community"s quality of life (Austin & Baharuddin, 2012;Elias et al, 2013;Abram et al, 2014;Aliagha et al, 2015;Hammond et al, 2015). Therefore, efforts need to be implemented to resolve the problem.…”

Development of Drone for Search and Rescue Operation in Malaysia Flood Disaster

“…In Malaysia, flood occurs nearly every year during the monsoon season and is considered as a regular natural disaster in the country. Given Malaysia's geographical location, we face a heavy and regular rainfall during the local tropical wet season from October to March each year and flood is a natural result of this cyclical monsoons [1]. As stated by Chan [2], when flood happens, they caused millions of Ringgit in damages, the loss of life and property along with agricultural and livestock devastation.…”