Data on Climate Change Discussed by Researchers at Vrije Universiteit (Regional Inequalities in Flood Insurance Affordability and Uptake under Climate Change)

2020 NOV 11 (NewsRx) -- By a News Reporter-Staff News Editor at Climate Change Daily News -- New study results on climate change have been published. According to news originating from Amsterdam, Netherlands, by NewsRx correspondents, research stated, “Flood insurance coverage can enhance financial resilience of households to changing flood risk caused by climate change. However, income inequalities imply that not all households can afford flood insurance.”

The news editors obtained a quote from the research from Vrije Universiteit: “The uptake of flood insurance in voluntary markets may decline when flood risk increases as a result of climate change. This increase in flood risk may cause substantially higher risk-based insurance premiums, reduce the willingness to purchase flood insurance, and worsen problems with the unaffordability of coverage for low-income households. A socio-economic tipping-point can occur when the functioning of a formal flood insurance system is hampered by diminishing demand for coverage. In this study, we examine whether such a tipping-point can occur in Europe for current flood insurance systems under different trends in future flood risk caused by climate and socio-economic change. This analysis gives insights into regional inequalities concerning the ability to continue to use flood insurance as an instrument to adapt to changing flood risk. For this study, we adapt the ‘Dynamic Integrated Flood and Insurance’ (DIFI) model by integrating new flood risk simulations in the model that enable examining impacts from various scenarios of climate and socio-economic change on flood insurance premiums and consumer demand. Our results show rising unaffordability and declining demand for flood insurance across scenarios towards 2080.”

According to the news editors, the research concluded: “Under a high climate change scenario, simulations show the occurrence of a socio-economic tipping-point in several regions, where insurance uptake almost disappears. A tipping-point and related inequalities in the ability to use flood insurance as an adaptation instrument can be mitigated by introducing reforms of flood insurance arrangements.”

For more information on this research see: Regional Inequalities in Flood Insurance Affordability and Uptake under Climate Change. Sustainability, 2020,12(8734):8734. (Sustainability - http://www.mdpi.com/journal/sustainability). The publisher for Sustainability is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/su12208734.

Our news journalists report that additional information may be obtained by contacting Max Tesselaar, Institute for Environmental Studies, Vrije Universiteit, 1081HV Amsterdam, Netherlands. Additional authors for this research include W. J. Wouter Botzen, Toon Haer, Paul Hudson, Timothy Tiggeloven, Jeroen C. J. H. Aerts.

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