Insurance Against Climate Change and Flooding in the Netherlands: Present, Future, and Comparison with Other Countries

Botzen, Wouter; Bergh, Jeroen C.J.M. van den

doi:10.1111/j.1539-6924.2008.01035.x

Cited by 189 publications

(126 citation statements)

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“…Proposals for public-private flood insurance schemes are, for example, found in Akter et al (2009Akter et al ( , 2011 and Aerts and Botzen (2011). Private flood risk insurance is not available yet in the Netherlands for a number of reasons, including the relatively high existing safety standards compared to surrounding countries and financial barriers related to the reinsurance of the risks of catastrophic floods (Botzen and van den Bergh 2008). The costs of flood safety are therefore currently paid by the public sector.…”

Section: Introductionmentioning

confidence: 99%

Modelling risk adaptation and mitigation behaviour under different climate change scenarios

Brouwer¹,

Schaafsma²

2012

Climatic Change

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The main objective of this study is to simulate household choice behavior under varying climate change scenarios using choice experiments. Economic welfare measures are derived for society's willingness to pay (WTP) to reduce climate change induced flood risks through private insurance and willingness to accept compensation (WTAC) for controlled flooding under varying future risk exposure levels. Material flood damage and loss of life are covered in the insurance policy experiment, while the WTAC experiment also captures the economic value of immaterial flood damage such as feelings of discomfort, fear and social disruption. The results show that WTP and WTAC are substantial, suggesting a more prominent role of external social damage costs in cost-benefit analysis of climate change and flood mitigation policies.

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Section: Introductionmentioning

confidence: 99%

Modelling risk adaptation and mitigation behaviour under different climate change scenarios

Brouwer¹,

Schaafsma²

2012

Climatic Change

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“…Mills 2003;LeBlanc and Linkin 2010), and would require higher awareness on part of the individual consumer as certain responsibilities are shifted toward individual level. Risk is thus defined as necessitating adaptations such as risk spreading and segregation (zoning in Germany or property-level assessment in the UK), and loss-reducing incentives and monitoring, such as resilience building and quotes on the property level rather than general quotes on insurance, as discussed in the UK (Botzen and van der Bergh 2008;Botzen et al 2010) and Germany (GDV 2011;.…”

Section: Discussionmentioning

confidence: 99%

“…However, although full insurance cover is required for mortgage to be granted, insurance coverage is not mandatory, leading to a higher level of uninsured clients among poor households (Botzen and van der Bergh 2008). This system has led to dissatisfaction from the industry on having to cover disproportionate risks in the face of large floods in 1998 and 2000 and is currently being renegotiated.…”

Section: The Uk: Private Flood Risk Insurance In Fluxmentioning

confidence: 99%

“…As a result of revised risks, the Calamities and Compensation Act (Wet Tegemoetkoming Schade bij rampen en zware ongevallen, in short: WTS), in force from 1998 (Botzen et al 2010), provides legal arrangements for disaster loss compensation In practice, this means that in cases of loss as a result of disasters such as floods, the state aims to compensate the loss using public resources, which derive from tax income and state loans. The WTS also aims at highlighting the role of new private insurance arrangements (Botzen and van der Bergh 2008). As is elaborated in Sect.…”

Section: The Netherlands: Public Risk Coveragementioning

confidence: 99%

“…Risk and damage quantification and prediction are the central premise that underpins adaptive actions taken by insurers to address climate change impacts. Risk can only be regarded as insurable if the probability and extent of losses under different levels of coverage can be assessed, and if knowledge and governmental regulations allow differential premiums depending on exposure, for instance to encourage policy holders to avoid building or residing in low-lying areas (Botzen and van der Bergh 2008). 1 Of particular importance for this paper is the fact that the ability or inability to acquire a certain type of insurance coverage, such as natural hazard insurance, may determine the location of economic and social activities.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

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Adaptation to climate change in the insurance sector: examples from the UK, Germany and the Netherlands

2013

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Adaptation to climate change, particularly flood risks, may come to pose large challenges in the future and will require cooperation among a range of stakeholders. However, there presently exists little research especially on the integration of the private sector in adaptation. In particular, recently developed state programs for adaptation have so far been focused on the public sector. Insurance providers may have much to contribute as they offer other parts of society services to appropriately identify, assess and reduce the financial impacts of climate change-induced risks. This study aims to explore how the institutional distribution of responsibility for flood risk is being renegotiated within the UK, Germany and Netherlands. Examining how the insurance industry and the public sector can coordinate their actions to promote climate change adaptation, the study discusses how layered natural hazard insurance systems may result from attempts to deal with increasing risks due to increasing incidences of extreme events and climate change. It illustrates that concerns over the risks from extreme natural events have prompted re-assessments of the current systems, with insurance requiring long-term legislative frameworks that defines the objectives and responsibilities of insurers and the different political authorities.

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Using practical and social information to influence flood adaptation behavior

Allaire

2016

Water Resources Research

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As the prospect for more frequent and severe extreme weather events gains scientific support, many nations are evaluating mitigation and adaptation options. Insurance and home retrofits could reduce household welfare losses due to flood events. Yet even after disasters, households often fail to take risk mitigation actions. This paper presents the first randomized field experiment that tests the effect of information provision on household uptake of flood insurance and home retrofits. A sample of 364 flood-prone households in Bangkok was randomly split into treatment and control groups. The treatment group received practical details on home retrofits and flood insurance as well as social information regarding the insurance purchase decisions of peers. Results indicate that the information intervention increased insurance purchases by about five percentage points, while no effect was detected for home retrofits. This effect is nearly equal to the increase in uptake that the national insurance program in Thailand has achieved through all other means since its establishment in 2012. If scaled up to include all uninsured, flood-prone households in Bangkok, nearly 70,000 additional households could be insured. The results suggest that well-designed information interventions could increase uptake of flood insurance, without additional premium subsidies or mandates. Increasingly, information interventions seek to promote climate mitigation by influencing individual behavior [Allcott, 2011;Ayres et al., 2013;Costa and Kahn, 2013]. Such persuasive appeals could also be used to encourage adaptation and risk mitigation behavior related to extreme events. This study is the first randomized experiment to address flood loss mitigation decisions. Experimental evaluation designs are rare in the environmental policy field [Ferraro and Hanauer, 2014]. Yet such designs are important since they are less prone to bias than observational designs.This study examined the effect of practical and social information on the uptake of flood insurance and home retrofits. The practical information provided objective facts about flood risk and mitigation options. In Key Points:Field experiment evaluated the effect of information on uptake of flood insurance and home retrofits Intervention provided practical details on mitigation options and the insurance decisions of peers Information significantly increased insurance purchases while no effect was detected for retrofits Supporting Information:Supporting Information S1Correspondence to: M. C. Allaire, ma3536@columbia.edu Citation:Allaire, M. C. (2016), Using practical and social information to influence flood adaptation behavior, Water Resour. Res., 52, 6078-6093,

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Insurance Against Climate Change and Flooding in the Netherlands: Present, Future, and Comparison with Other Countries

Cited by 189 publications

References 51 publications

Modelling risk adaptation and mitigation behaviour under different climate change scenarios

Modelling risk adaptation and mitigation behaviour under different climate change scenarios

Adaptation to climate change in the insurance sector: examples from the UK, Germany and the Netherlands

Using practical and social information to influence flood adaptation behavior

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