IBC.Flood

Question 1

Specific reasons for non-coverage of overland flooding

Answer 1

• adverse selection, if offered, would be too expensive and only ppl have protential loss will buy it
• government under investment in risk planning & mitigation
• lack of effective flood hazard maps

Question 2

Example of Government under-investment

Answer 2

Hint: BAIL

• obsolete Building code
• poor Asset management
• lack of Infrastructure
• inadequate Land using planning

Question 3

Pre-conditions for strong flood risk management

Answer 3

• Effective flood hazard maps
• Infrastructure in flood defenses
• awarness of risk, risk mitigation and financial management of policyholder
• incentives: limited gov’t compensation for past disaster relief as encouraging strong individual risk mitigation

Question 4

why do insurers often cover uninsured floods

Answer 4

• sewer back up is usually covered under the policy, overland flood is not, but hard to separate the loss
• aviod reputational damage and political pressure