Congressional Briefing - March 13, 2006
The Market Penetration Rate for Flood Insurance: Estimates and Policy Implications
Presented by Lloyd Dixon
Monday, March 13, 2006 from 12:00-1:30 P.M.
2203 Rayburn House Office Building
Lloyd Dixon, PhD, a senior economist at RAND's Institute for Civil Justice, will present The Market Penetration Rate for Flood Insurance: Estimates and Policy Implications. In 1968, Congress created the National Flood Insurance Program (NFIP) in response to the ongoing unavailability of private flood insurance and the continued increase in federal disaster assistance. Since then, several laws have been passed to increase the number of policies, and now more than 4.5 million are in place.
Recent questions about flood insurance have emerged in the aftermath of Hurricanes Katrina and Rita. As part of a wide ranging evaluation of the NFIP requested by the Federal Emergency Management Agency (FEMA) that began prior to Hurricane Katrina, RAND has concluded a study that estimates the proportion of homes across the nation that carry flood insurance. While the RAND study does not directly address the hurricane-related issues, the study results are useful for evaluating reforms to the NFIP.
This presentation will answer three main questions vitally important when assessing NFIP:
- What is the market penetration rate for flood insurance and the compliance rate with the mandatory purchase requirement?
- What are the factors that drive the purchase of flood insurance?
- What are some of the benefits of, and opportunities for, increasing market penetration rates?
Lunch will be served.