Barriers to insurance as a flood risk management tool: Evidence from a survey of property owners

The Government of Canada has worked with insurers to introduce flood insurance for the first time as a part of a broader shift towards flood risk management (FRM) to limit the growing costs of flooding. The viability of flood insurance in Canada, however, has been questioned by research that disputes the utility of purchasing coverage by property owners.

This study tested this assumption by drawing on public opinion survey data to assess factors that influence decisions about the utility of insurance. The findings reveal that Canadians have limited knowledge of flood insurance coverage, exhibit a low willingness-to-pay for both insurance and property-level flood protection measures, and expect governments to shoulder much of the financial burden of flood recovery through disaster assistance.

This study also confirms an opportunity for Canadian governments to adopt policies that strengthen the consumer demand required for viable flood insurance. In particular, better coordination is needed to assign responsibilities and broaden the portfolio of policy instruments employed in flood management.