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Come Rain or Shine: Evidence on Flood Insurance Purchases in Florida
Article first published online: 25 JAN 2010
DOI: 10.1111/j.1539-6975.2009.01349.x
© The Journal of Risk and Insurance, 2010
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How to Cite
Michel-Kerjan, E. O. and Kousky, C. (2010), Come Rain or Shine: Evidence on Flood Insurance Purchases in Florida. Journal of Risk and Insurance, 77: 369–397. doi: 10.1111/j.1539-6975.2009.01349.x
Publication History
- Issue published online: 4 MAY 2010
- Article first published online: 25 JAN 2010
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Abstract
This article provides a detailed analysis of the operation of the National Flood Insurance Program (NFIP) in Florida, which accounts for 40 percent of the NFIP portfolio. We study the demand for flood insurance with a data set of more than 7.5 million NFIP policies-in-force (the largest ever studied) for the years 2000–2005, as well as all NFIP claims filed in Florida. We answer four questions: What are the characteristics of the buyers of flood insurance? What types of contracts (deductibles and coverage levels) are purchased? What are the determinants of claims payments? How are prices determined and how much does NFIP insurance cost?