definition

Flood insurance is an important risk management tool that can be applied at various levels: individual, corporate and government. It provides a mechanism for sharing potential economic losses with others. The basic principle is to spread the risks over time, and among individuals and organizations, which pay insurance premium against a specific risk. Insurance can play an important role in a nation’s social and economic recovery by channelling funds for rebuilding purposes through insurance payments. Coupled with the appropriate land use control and flood emergency management measures, flood insurance can serve as a useful tool to deal with residual risks.
(Associated Programm on Flood Management, accessed on Sept. 2016)

Co-benefits and impacts

Insurance can be an important factor in increasing the awareness and reducing the financial risk for individuals, enterprises and even whole societies where natural hazards are concerned. Proper insurance can considerably mitigate the effects that extreme events have on them and can prevent them from being ruined. Flood insurance claims are paid even if a disaster is not declared by Presidential declaration. More than 20 percent of National Flood Insurance Programme claims come from outside of mapped Special Flood Hazard Areas. Flood insurance policies are continuous, and are not non-renewed or cancelled for repeat losses. Flood insurance reimburses people for covered building losses for residential occupancies and for businesses.
(FEMA, 2012, accessed on Sept. 2016 )

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Last modified: Sept. 16, 2016, 6:12 a.m.