Improving National Flood Insurance Program's Rate Model for Leveed Areas in the United States

In this presentation, it is argued that the insurance rate model used in the National Flood Insurance Program (NFIP) in the United States can be improved for leveed areas. It is demonstrated in this presentation that the rate... [ view full abstract ]

In this presentation, it is argued that the insurance rate model used in the National Flood Insurance Program (NFIP) in the United States can be improved for leveed areas. It is demonstrated in this presentation that the rate formula can be adjusted by incorporating the conditional probability of the levee failure, if it was available. The conditional probability of failure can be obtained from fragility curves. It might be costly for communities to develop fragility curves. However, benefit cost analyses might indicate that the cost is offset by other factors including the reduced cost of insurance and by the fact that the process of developing fragility curves could result in identifying major risk drivers and help communities spend their resources wisely to mitigate them and avoid future losses. Please note that views expressed here and in the subsequent discussions are those of the author and do not necessarily present those of FEMA.