Issue Briefs


Understanding Individual Flood Risk Perceptions and Flood Insurance Choices to Build More Resilient Communities: A Survey of New York City Residents
Six months after Hurricane Sandy, we surveyed over 1,000 homeowners in New York City who live in a flood-prone area about their flood risk perceptions and flood insurance purchases. 44% of respondents stated they purchased flood insurance because it was mandatory. Only 21% bought flood insurance voluntarily, 33% did not have coverage, and 2% did not know whether they had flood coverage. People tend to overestimate their flood probability and underestimate their potential flood damage.






 An Economic Analysis of Corporate Demand for Insurance in the U.S.
The U.S. Terrorism Risk Insurance Act (TRIA) was established in 2002 as a temporary measure to make terrorism  insurance widely available to corporations.  TRIA will expire at the end of 2014 unless extended by the federal government.  If extended, the government might require insurers to assume more risk which could increase prices.  We find that under current market conditions, firms’ demand for terrorism insurance is strong and is not very sensitive to gradual price changes.





 Quantifying the Role of Effective and Well-Enforced Building Codes: The Case of Hail Storms in Missouri
A midsize community of 50,000 people that experiences a moderate hail storm could expect to reduce losses by approximately $4 to $8 million by adopting and enforcing appropriate building codes.






Addressing Affordability in the National Flood Insurance Program
We propose a voucher/loan program that will assist homeowners to afford risk-based insurance premiums and also make improvements to their home that will reduce their future risk. The lowered flood risk will lead to reductions in the risk-based premiums charged by the NFIP.





NFIP Community Rating System (CRS) Analysis for New York State
The NFIP’s Community Rating System (CRS) is a voluntary incentive program that encourages community floodplain management activities that exceed the minimum NFIP requirements. Today, only 28 of the 1,466 NFIP communities in New York State participate in the CRS. This 1.9% participation rate is three times lower than the national average





Analysis of Flood Insurance Protection: Rockaway Peninsula in New York City
The Rockaway Peninsula (RP) is an 11-mile community in New York City with a population of 103,825 that was severely impacted by Hurricane Sandy.  Data analysis shows that only 14.4 percent of the housing units in the RP had flood insurance in 2012.  





Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry
We propose three guiding principles to make insurance more transparent and equitable, and to encourage investment in protective measures: Principle 1: Premiums reflecting risk; Principle 2: Dealing with equity and affordability issues; Principle 3: Multi-year insurance.  The National Flood Insurance Program (NFIP) is a natural starting point for multi-year insurance tied to the property, not the homeowner.






Failing to learn from experience about catastrophes: The case of hurricane preparedness
The more effective an investment is in preventing harm, the more difficult it is for decision makers to remember the need for the investments.  It is the experience of real — not imagined — losses that seemed essential for convincing decision makers of the value of protective investments....>> more





Hurricane Sandy's Storm Surge and the NFIP

Following the devastating storm surge and flooding from Hurricane Sandy, concerns have been raised about the status of flood insurance in the United States. Our analysis shows that many homeowners who sustained flood damage from Sandy did not have a flood insurance policy...>> more





Political Participation: Citizens' concepts of their duty as voters
Rationales for voting include self-interest, duty to nation or group, and duty to humanity.  People may believe that voting in self-interest is a rational way to pursue their interests, however this is not rational, because the probability of a single vote having an effect is extremely low.  Americans who believe it is their duty to vote on the basis of self-interest tend to oppose taxes, but favor spending that they see as benefiting themselves personally...>>  more




Countering the threat of nuclear terrorism
A U.S. law, “Implementing Recommendations of the 9/11 Commission Act of 2007,” requires that all cargo bound for the U.S. must be scanned by non-intrusive technology to detect radiological contraband before the cargo is loaded onto a ship at an international port.  The operational feasibility of 100-percent scanning has been questioned by many government officials and private sector professionals involved with managing supply chains.  Our study compares the operational feasibility of two types of inspection protocols designed to detect the presence of nuclear devices... >> more





Who pays and who benefits most from NFIP flood insurance?
Our analysis of the entire NFIP portfolio between 1978 and 2008 reveals that in some states, policyholders have paid as much as 15 times in premiums as they have collected in claims; in other states, policyholders have received 5 times more in insurance claims than they paid in premiums over this period...>>  more





How long do homeowners keep their flood insurance coverage?  
Many people who live in flood-prone areas had not purchased flood insurance or had let their policies lapse.  The average tenure of flood insurance in the U.S. is between 2 and 4 years… >> more





The Psychology of Natural Hazards
Why do few people in catastrophe-prone areas invest in risk reduction measures?
Long‐term sustainable solutions can overcome myopic thinking and provide economic incentives for encouraging sound investments in risk reduction measures... >> more





Can property insurance companies in hurricane-prone areas sustain their operations? 
The cost and availability of property insurance is becoming a significant problem for some residents in high-risk coastal areas of the United States... >> more